4 ms·
you are completely correct, I'm surprised it even needs to be explained.
by luckydata 9y ago
you are completely correct, I'm surprised it even needs to be explained.
- thaumasiotes 9y agoA history of regular payments on a card with a $100 limit doesn't require you to go into debt in any way except for an accident of nomenclature. Pay your $5 every month; you'll have normal credit and no carried debt.
- Larrikin 9y agoIf it is that easy, isn't it worthless?
- thaumasiotes 9y agoNo. That is how you build a credit score. If your goal is to build a credit score, it is not worthless, and it is also not a risk to your personal finances or a means by which it is even possible to get into nontrivial debt. A large part of the credit score concept is to flag people for whom paying a trivial bill on time is difficult.
- luckydata 9y agoYou can't build a functionally useful credit score that way. The amount of credit is accounted for in the model, not just the percentage used.
- thaumasiotes 9y agoAmount of credit is accounted for in the model, yes. But it's not the only thing accounted for.
- kpil 9y agoI live outside US. I had no idea. Here you get full credit worthiness based on your income, savings and loans. The income and (by tax proxy) savings are public, so no loans and some income and moderate savings will give you full credit.