fun fact, credit score is not a thing in most of the world.
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And didnt exist until 1989 in the US. Credit scores and Tay Tay are the same age.
However if you were a minority or a woman it was also a bitch to get a loan prior to it. Though women couldn’t even have their own bank accounts till… the 60s/70s?
Women earned the right in the 60s, but it wasn't until the Equal Credit Opportunity Act passed in '74 until banks were forbidden from requiring a husband's signature.
The Equal Credit Opportunity Act prohibits financial institutions from discriminating against applicants based on their sex, age, marital status, religion, race or national origin.
https://www.forbes.com/advisor/banking/when-could-women-open-a-bank-account/
I worked for a Credit Union as a developer. I can attest that at least where I worked, there was a host of yearly modules you had to complete to ensure you were up to speed on how to not be an asshole and they took it quite seriously.
fun fact, neither is the social credit they complained that china had, but the western credit score is basically a social credit that punish people for not consuming beyond their means.
China social credit started out as something like a credit score where you would get beneficial services/rates with a better score from lenders such as Sesame Credit.
The government took that and applied it to many spheres of the society in a pilot program. I don't know how it is today since I haven't looked into that since 2019.
So when you have some car insurers, for example, that offer to put a gps device in your car in exchange for better rates, this is how the social credit system started through private companies.
It's reasonably common in the developed world. And it's a good idea that lenders be able to easily know how responsible borrowers are with repayment. That the US' implementation of credit scores is problematic in some areas shouldn't be used as a blanket dismissal of a credit scoring system.
The US credit score system is from the 60's. Things worked just as well before it existed...
This is technically true but extremely deceptive if you don't know the history. From "Creditworthy: A History of Consumer Surveillance and Financial Identity in America" (Lauer, 2017; Columbia University Press):
Chapter 3: "By the late 1890s systems for evaluating the credit risk of individual consumers existed in metropolitan centers throughout the United States."
Chapter 4: "During the early twentieth century millions of Americans came under the watchful gaze of newly formed credit bureaus. But these bureaus were only one arm of the emergent consumer credit apparatus. Their counterpart was the credit department of individual stores, where credit managers interviewed, documented, and tracked customers for their own benefit and that of the local bureau."
Credit reporting has existed for a very long time in the US. So while a computerized score wasn't there until the late 1950s (basically as soon as such a computerized score could exist, underscoring how eager banks were to implement it), your comment being technically true has no real impact on the argument of the merits of credit scoring.
Is credit score in the US the same as social score in China but you are owned by your billionaire instead of the party?
And for anyone in the US, just know that State Farm is one of the worst companies for Homeowners Insurance. They will pay the bare minimum. All insurance sucks, but State Farm is on a whole other level of suck. If you are with State Farm don't make the mistake I made and quickly find another company.
Seriously, leave State Farm. By not leaving I am now paying $20k that they should have covered.
Remember Katrina?
Like a grim reaper state farm is there
Someone t-boned (and totaled) my truck and they had State Farm for car insurance. Everyone involved acknowledged I was not at fault, except State Farm. They wanted to write it off as a mutual fault, which would mean they wouldn’t have to pay for my damages. They also never told my insurance company, because it was news to them when I mentioned it. I just hope my insurance doesn’t go up because of their ineptitude.
Yeah fuck that. Make sure your insurance company is going to bat for you, that's part of what they are paid for. Make it clear you dont expect this to count against you at all because the other driver is at 100% fault.
Shouldn't take much push from them for state farm to fall into line.
Good time to mention my wife had State Farm when she was run off the road. We had the guy on dashcam with clear as day video of his face, and license plate. State Farm couldn't find the driver or the car, and said that we should just pay to have the wheels repaired (got curbed hard during the incident). The "repairs" were the same amount as the deductible. Then one of their reps let slip that they not only knew who the guy was, and who owned the car, but that he was covered with their insurance. So SF was pretending not to find they guy so they wouldn't have to pay our deductible... Shady as fuck.
I just left a job with State Farm. They also the most expensive and go out their way to fuck you hard.
I got them to replace my roof like 4 years ago, but it was an argument that took a couple of months because they wanted to go around and spot replaced only the damaged shingles. I stayed nice and held my ground that doing so would look bad and thus diminish the value of my home. It was like pulling teeth, but I was able to talk with someone at state farm who felt like wanting me to get my way by speaking nicely without myself being a pushover.
I had them when we bought our house. A tornado game around the second year. They sent me a check for 6k and expected me to get someone to do only half my roof. Took me little over a year and half. Found a guy who did the whole roof for the 6k. I turned in the recipient and pics and they sent me another check for 7k. I said what's this? They said thats what the claim was for. They estimated 12k. I told them if they paid that up front I would have gotten job done a year earlier. Because I gave them a quote I had gotten for 11k. Joke on them I got pocket that 7k, because whole roof was done for 6.
Of course they raised my rates for filling a claim. Which is one of the biggest scams on earth. Insurance is supposed to be the transfer of risk. They are supposed to protect you. But if you file they raise your rate.
Reminds of the story of this old guy. Had AllState for 20 years. Always paid, never had a claim. He gets into a fender bender and he said they raised his rate. He was pissed. Twenty years of monthly payments. Paid in way more than the wreak cost, and they fuck you.
Also State Farm supposed to be a mutual Insurer which means your supposed to get a check at the end of the year for any unused money. Has anyone ever gotten a refund or money off the renewal?
just know that State Farm is one of the worst companies for ~~Homeowners~~ Insurance.
I wouldn't get any state farm insurance. We had to sue to get the very coverage outlined in the policy for uninsured/underinsured driver coverage.
Just the worst.
The real death of America is everyone drowning to death in made up fees.
No kidding! Way back in the 80s I had a US Bank account called "The Only Account". It was a checking and savings account where checking always had a balance of zero. When I wrote a check or withdrew money from an ATM, they automatically transferred money from savings to checking to cover it, and then the checking balance immediately went back to zero and that was that. No overdrafts. Ever. There was an annual fee of I think $20/year.
I don't know where that idea went, but banks and even credit unions now act like they never heard of such wacky nonsense. "Overdraft protection" consists of loaning you the money, no matter how much you have right there in your savings acct, and they charge a fee each time and of course also charge interest on the loan. Ridiculous.
Yeah cuz a credit score measures how good you are at being a credit customer, not how good you are at money.
My dad paid off his mortgage and owned his vehicles outright. He had been that way for about 10 or 12 years when he tried to buy a small cabin. Even though his finances said he could buy it outright, he tried to get a small mortgage....the banks REFUSED to give him a mortgage. They said he basically didn't have a credit history. Its all made up bull excrement that screws with peoples lives for the fun of it.
My premium nearly doubled because it's a manufactured house and it crossed the 25 year old line.
Fuckk. Sorry to hear that.
Its crazy, the only debt I've held is student loan debt and I have paid the bill every single month. Otherwise I use checks and a debit card, I had money to buy a used car upfront.
Went to get a credit card. My credit score is below 700, and I was deemed "unqualified" because, get this, I don't have a history of paying off debt, because I have not held enough debt to prove I can pay it off.
My credit rating is so bad that I had to have my brother co-sign a lease for me fifteen years ago. The landlord told him his credit rating was the highest he's ever seen. My brother (and his wife) were in debt up to their eyeballs - over $100K in credit card debt and a mortgage they were deeply underwater on. They're still in bad shape financially; meanwhile I now own my own home outright (having paid cash for a fixer-upper after saving up for a few decades). I still have shitty credit and it's not affecting me negatively in any way.
Just dealt with this. I didn't even exist in the credit system. I've even been told if I had BAD credit I would qualify for something.
Eventually I did get connected to a small local credit union and got a pretty good deal on interest as a 'first time buyer's program.
Yes my car insurance jumped $100 the minute I paid off my car.
I've found that this is usually a "staying with a single insurance provider" problem. I usually end up switching every two years or so, but I check everytime my six month renewal comes up. I've found that my premiums pretty consistently go down so long as I keep looking around. The last few times I switched from geico to progressive then back to geico, and the cost went down each time I switched.
Fun fact. At the last call to make sure my insurance was switched over properly, I had the csr angrily explain that in order to get the same affect, all I had to do was ask for a reevaluation of my policy. It turns out that the automated systems that send out your new price every renewal don't do a good job of adjusting the premiums down and you're supposed to ask a person at the company to review things if you don't like the automatic price.
I plan on continuing my personal policy of switching providers every few years anyways. I'd rather have the new customer prices than deal with a person on the phone going through every option to see if the new price is actually better or worse than the competitors offers.
I had the csr angrily explain that in order to get the same affect, all I had to do was ask for a reevaluation of my policy
"If it's hurting your customer retention, it sounds like you stupid fucks need a reevaluation of your pricing policy"
Not saying the UK has it right (cos we definitely don't) but the 'loyalty penalty ban' has really helped.
You can't be charged more for staying with an insurer than if you were a new customer.
I do pretty much the same, it does seem like it's usually around the 2 year mark that they try to raise premiums. I may try the policy evaluation thing next time just to see what happens. But yeah, it's always a good idea to look around at other carriers when they pull this crap.
it's your car now, not the bank's. so you can reduce your coverage and lower your premiums. the higher rates are to make sure the insurance company doesn't lower their profits when you drop the 'full' coverage.
Yeah. Between this and the “switch providers” advice I will be looking at it. I am not sure I want to reduce my coverage though. Where I live people are absolutely batshit. I know everyone says this…but I’ve never felt more in danger driving than I do in Connecticut, surrounded by people rich enough to murder me with their car and think of it as an inconvenience.
heh heh I am at the point where my mortgage is paid and I have no CC debt. I have some savings and retirement accounts. But I cannot rely on this since we have the Trump Tariff Taxes. So I suppose I cannot retire this year as I hoped. I have to save more. My dh is 3 years younger than me and really wants retirement... he is a construction union guy so I tell him to make an appointment w/their funds person and we can design a plan. I will likely continue working part time for the next 6 or 7 years to cover healthcare unless the Democrats pull their heads out of their asses.
make an appointment w/their funds person and we can design a plan
"Do you have two million dollars?"
"No."
"Plan to go back to work."
The shitt9est thing about credit is that payments that don't improve your credit can still hurt it when you miss.
Late on rent or your cell phone plan? That's a ding on your credit report. You can't get a loan because you haven't established that you'll pay your debts.
Pay your rent on time for 30 years straight? No credit history. You can't get a loan because you haven't established that you'll pay your debts.
Credit score in Murica is the dumbest thing I've ever heard. You'd think your credit score would be high if you always paid everything in time, were never late and never penalized. Instead you only have good credit score if you're perpetually in debt. Wtf?
Think of it as a profitability index rather than a diligence index, and it will make more sense.
No offense, but you're misinformed.
You get a good credit score by borrowing money and paying it back faithfully, not by being perpetually in debt. I carry a mortgage but no other debt, and pay off every credit card balance before charges or interest accrue, and my credit score is solidly in the top range.
I know it's a crazy concept, but to be considered a safe person to lend money to, you have to actually borrow it sometimes and prove that you will pay it back.
You get a good credit score by having debt. That's just kind of common sense, because they don't know how to score you until you gain some debt. That part is mostly okay.
The dumb part is when you pay off that debt, such as a mortgage or car loan, your score actually goes down.
just paid all credit cards to zero, FICO 8 went up 16 point, FICO 9 went down 15 points 🤷
Stop trying to max your credit score. You don't win any extra prizes for having an 850.
Having a good credit score (>670) isn't difficult. Have a couple of cards, keep your balance under 1/3 of the limit, and pay it on time. That's it. You'll have a 700 in short order. Getting it above 750 is just more of the same.
I get that there are perfectly responsible people who don't leverage credit to gain their needs and then are rejected by the banks when they go looking for a 200k loan. But that's not the world we live in. Bill the Banker isn't the guy whose lived in your community for twenty years and goes to your church. That world is gone and had problems too.
This impersonal world sorta sucks, but I'm not close friends with my neighbors and some of them seem like people I wouldn't get along with anyways.
The real rub of it, in my opinion, is we are subject to these standards without being consulted or, really, considered.
But honestly, don't worry about maxing your credit score.
On the topic of the title: In my own case, I didn't even pay all of my debts, all it took was to pay off my student loans. My credit score dropped 30+ points from that and has never recovered since.
And to all the liars who said some variation of "it's just a temporary drop" ... You are liars. That is simply not true, at least not for everyone, and you lied. Maybe consider stop giving advice about things when you're clueless.
And to anybody who might consider listening to those clueless liars, please note that a whole lot of the advice you might read from people online is coming from clueless liars.
Okay, I'll end my rant there.