Here is a link to my other post where I expressed my thoughts much better, if you are interested you can take a look – https://lemmy.world/post/37101088
Here is a link to my other post where I expressed my thoughts much better, if you are interested you can take a look – https://lemmy.world/post/37101088
A bad credit score won’t prevent me from buying groceries.
Yes credit scores are bullshit and the capitalist drive to maximize profit returns that leads to the application of credit scores to all sorts of things is a problem, but you’re delusional if you think credit scores are WORSE than the potential to entirely freeze bank accounts due to political opinions.
I’m curious about this point because, and correct me if I’m wrong, the UK government can already freeze people’s assets via the police today, it doesn’t need a national ID scheme to do this.
Credit scores are used today to deny people access to housing and finance services predominantly, but can also block people from having mobile phones and even jobs.
And they’re opaque we have no real way of knowing what data is used to determine them and in what way. That might include what you tweet about for all we know
Given a lot of people out there need to be able to access finance in order to be able to handle unexpected emergency costs, a bad credit score very literally could cause someone to not be able to afford groceries. Average personal debt is rising faster than inflation across the western world, so this is an increasingly big problem.
It’s worse because it’s a real problem today, not a hypothetical future one.
Yes a bad credit score could stop you from having access to things in emergencies, yes it could stop you from having access to things that are important in life, but there are a lot of extra steps and special circumstances that have to occur before a bad credit score is directly responsible for your fridge being empty. Most of those conditions involve simply not having money to access in the first place, and very few of them are going to be as sudden and immediately effective as a freeze on your bank account.
Needing access to financial services to handle a possible emergency is all well and good, but lacking that support structure absolutely pales in comparison to simply being forbidden from conducting commerce of any kind. No emergency needed, savings are irrelevant, the only preparation that could help you is a mattress full of cash and that’s definitely neither a good solution nor a long lasting one. People live their lives every day with bad credit scores, it sucks but it’s doable. Freezing what assets they have would make an immediate and decidedly negative impact well beyond the inability to get a loan. Thinking that credit scores are worse because they’re not a hypothetical future problem is like saying a stubbed toe is worse than getting shot, because you haven’t gotten shot yet.
They’re not. They exist for a very good reason, and are purely beneficial to people who repay what they borrow. They only ‘hurt’ people who don’t repay their debts, but only insofar as it makes it more difficult for them to take more money from people that they then also won’t pay back.
They also hurt people who are the most responsible with their credit. They ding you on your score if you don’t carry a balance on your card.
This is unequivocally false. I can’t believe how pervasive this common misconception still is:
Carrying a balance on your card literally can only hurt you, as the only thing the actual dollar amount of the balance impacts is utilization, in other words, ‘what percent of your total credit limit are you using’, and for that, lower is better. Plus, carrying a balance means paying interest, which is money down the drain on top of that.
I haven’t paid a cent of interest on any of my credit cards for well over a decade; I use it for my everyday purchases, and pay it off every month—my credit score’s firmly in the 800s, and 750 is the ‘you won’t get a better rate’ threshold for 99.9% of lending.
That’s why my credit score went down when I paid off my student loans, right? Get the fuck outta here.
No, it didn’t. Maybe your score on Credit Karma did, but that’s because Credit Karma’s system of estimation (VantageScore I think it’s called) stops considering a loan the moment you pay it off, while the actual credit reporting agencies continue to consider it (re average age of accounts) for 10 years after closing if it was in good standing, or 7 years from ‘date of first delinquency’ if it was closed because of charge-off or something like that.
My own average account age is less than 10 years, yet my credit score is in the 800s, even though I have no outstanding loans, I just use my credit card for everyday purchases and pay it off every month.
So ‘get your ignorance the fuck outta here’ and open yourself to learning how things work.
So all available reporting says my credit score went down when I paid off my loans and has remained in this new lower state for months since, but the secret real number used to decide my fate maybe didn’t. Yeah you’re right that’s great. I feel better already.
Get the fuck out of here with that. Credit scores are purely a value used by lenders to determine how much money can be extracted from a consumer. It goes down if you’re delinquent, it goes down it you pay things off early without racking up all the interest they wanted, it goes down if you don’t run enough of a balance on your credit cards. It doesn’t protect consumers, it barely protects lenders, it’s purely used to determine how much can be extracted from a consumer’s bank account.