TIL personal credit scores only started in 1989 ( en.m.wikipedia.org )

I always assumed credit scores were an integral and historic part of the American financial system.

They were not, they are very recent，most of your parents didn't have credit scores growing up, and as you can probably tell or at least intuit, it's mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.

moon ,

It's a silly system but really not that hard to do well. Put everything on credit card and set everything to auto pay the statement. That alone will give you good enough credit with little effort.

optissima ,
@optissima@lemmy.world avatar

You forgot the most important part: never have an unexpected expense, like going to a hospital or your car breaking down.

Bakkoda ,
@Bakkoda@sh.itjust.works avatar

We got a new card, no interest for a year. Put our entire kitchen reno on it. Credit score went down 47 points altogether. Paid it all off, credit score went up 17 points. All of this inside 6 months. It doesn't make sense lol.

UmeU ,

Interest or not, you should never carry a balance on a credit card. You should also never have more than 10% utilization.

Looks like you probably did three things which hurt your score… having a new account, carrying a balance, and possibly having more than 10% utilization.

I know the whole credit score thing seems stupid, but if you know how their calculations work you can get a high score in just a few years of doing everything correctly.

TubularTittyFrog ,

right, the thing that idiots do is load up their card once they get one and then make minimum payments.... tanking their credit. and instead of paying it down... they open up a new one.

thatgirlwasfire ,

High utilization affects your score. For example, if you have a credit limit of $1,000 and have a balance of $900 when reported to credit agency, your utilization will be 90%. This will negatively impacts your score even if you pay it off on time. It is possible to avoid this by paying off purchases immediately, since your balance is only sent to the credit agencies once per month. Also if your limit was $10,000 the same balance would only be 9% utilization which is a lot better.

intensely_human ,

Oh interesting. A friend is a financial advisor and had told me that he often just pays his card immediately after making a purchase. That must be why.

TubularTittyFrog ,

or it's just because he doesn't want to pay interest payments.

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