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I hope this right gets applied to credit scoring agencies as well, which don't publish the methodology in the calculation of credit scores. God knows what the e
by epgui 2y ago
I hope this right gets applied to credit scoring agencies as well, which don't publish the methodology in the calculation of credit scores. God knows what the exact mechanics of these calculations are (beyond the well-known but very hand-wavy broad strokes), and they impact people in serious ways.
- SoftTalker 2y agoIt's 90% "do you pay your bills on time" it's really not as nefarious as you're making it sound.
- AlexandrB 2y agoReally it's 90% praying that they don't fuck up and confuse you with someone else. The nefarious part is there's no accountability if they're wrong.
- epgui 2y agoI'm not at all trying to make it sound nefarious. I'm saying that credit scores being a black box is inherently not a good idea. There can never be any accountability, because there is no visibility. In general, it's impossible to verify the correctness of a credit score. It's also impossible to discuss the fairness of the scoring methodology, because all we can do is speculate and guess. For something so impactful to an individual, you'd think there would be more government oversight / regulation... And more transparency.
- akira2501 2y ago"And hope that no third party ever misreports anything to your profile." If you've never been a victim to this then you don't understand how pernicious this system is. Once one creditor does this, then all the other creditors automatically operate on that information. They don't double check, they don't notice the strangeness of the report, they don't care. Your credit changed, so your limits changed, so they want their money back NOW. It's a nightmare.
- Workaccount2 2y agoMaybe I am crazy, but I have found that living within my means is an extremely effective method for keeping a high credit score.
- Brian_K_White 2y agoI have found that living within my means resulted in no credit score at all, which was treated as the worst possible credit score, when I finally started to investigate the possibility of buying a house. 45 years old at the time, $120k income, same job since '99, no debt at all, cars all paid cash etc, Didn't owe anyone a dollar, not late on any bills for decades, solid predictable longstanding income, only about 100k in the bank though not counting the 401k, ... no credit. Because I never even got a credit card let alone used one. All cash/debit whole life. So, F this line. It's only true if it also includes "...and intentionally aquire and actually use a couple of credit cards that you don't want and don't need, for no other reason than to go through the motions." And even then it still doesn't result in an exactly great credit score if you always pay in full and never carry a balance. Even after years. 10 so far for me since the above. It's ok, but not great. So yeah, F this line.
- HWR_14 2y agoPaying in full/not carrying a balance has no impact on credit score vs. making minimum payments.
- meowster 2y agoWell, making minimum payments has a negative impact because then you're carrying a debt which eats into your debt vs ability to borrow ratio which does have a big impact. Paying off cards in full each month is the absolute best thing to do for your credit score (and saving money by not paying interest).
- epgui 2y ago> making minimum payments has a negative impact because then you're carrying a debt I think it would depend on your credit utilization %. If your credit utilization is too low, it may hurt your score. Of course if your credit utilization % is too high then it's an (even worse) issue. But who really knows? It's not like we have the formula.