And rent. My last rental had a special offer though: pay an extra fee every month and they'll report your rent to the credit bureaus, raising your score through the roof.

Careful, that'll lower your score

You can use Kikoff or CreditKarma or things like that to regularly report your paid on time bills, and that does, slowly, incrementally, increase your credit score.

Yeah its still total bullshit that that isn't just like a pre-baked in part of the credit system, but you can do this.

There's some that have now adapted their policies to include bill payments

Absolutely. I could candidate some buildings in particular. They have some sort of pedo brand.

Paying your utility bills on time for your whole life will not raise your credit score one point.

FICO Credit scores measure exactly one thing: How good are you at regularly paying on debt over time? Thats it.

Utility bills are generated and cleared every month (assuming you pay). If you got in a financial jam, you could probably lower how much HVAC you use or lower your water usage while times were tight. You can't do that on installment loans. The full loan payment is due every month. Utility bills are not a great measure of the ability to regularly pay on debt over time, which is what FICO scores measure.

That one actually makes sense to me. A utility bill isn't credit, it's a different debt, so paying it when you're supposed to doesn't demonstrate responsible use of credit. On the other hand, if you can't pay off any sort of debt on time, you probably aren't a good risk for loaning money to.

In my area it can be very difficult to get an apartment unless you or someone you're renting with has a decent score. Participating in this bullshit isn't a choice for some people.

I mean, good for you, but most people will need to go into debt for something at some point in their life.

It's so much worse than I think you even realize, but you definitely nailed some of the key pieces.

It's correct that we don't opt in, that it's strictly not govt, it's corporations (3 of them), and that modern life in the US makes it impossible to avoid playing this game.

Some additional details:

• the 3 companies each keep their own records - usually they match each other closely, but not always
• wrong information in the consumer's credit report is arduous to correct and basically 100% the consumer's responsibility - too fucking bad, whatever outcome this may cause
• the only way to know if our info is being used to fraudulently open accounts is to periodically check these reports (noting the difficulty in correcting them)
• malicious use is such a problem that all 3 "services" ("extortion rackets" is literally more accurate) recommended "locking" one's credit with each of the 3, so no accounts may be created at all
• many stories of kids finding out their parents loaded them up with debt, very difficult to overcome
• the score is a measure of how much lenders can expect to profit off you - financial decisions that are good for the individual are not necessarily good for the score
• evictions, like other records, stay active for 7 years I believe, and having an eviction on one's record makes every part of renting worse and harder

And nothing I've said is even recent insanity, all of that's been true a long time. It's really staggering just how effectively the US has systematized destroying our working class. We've been the global leader in innovating oppression for decades, it's been interesting watching the rest of the world start to catch on just how severe it is here.

To be fair, the fact that you haven't heard of any Aussie credit is because companies keep it private to themselves. They definitely have financial information on you and utilize it to decide the interest rate on your loans.

Much less horrible than the US dystopia for sure tho

because you deeply misunderstand it.

it basically lets lenders know if you have a history of paying back your loans or not.

it's that simple. and in the USA medical treatment often requires loans, just like buying a house or car does.

missing a single payment does little to nothing to your score. missing several payments, and defaulting, tanks it.

How do Americans tolerate this?

Brainwashing. Americans don't realize they live in a Dystopian shithole where, since the 80s, the rules are made by the rich to keep the common person down.

We're coming to the end game of this now.

First off, it's not a social credit score, it's a financial credit score, we're not talking about the system China has for it's citizens.

As with many of these deep dives on Americanisms, what you've found is generally worst case scenarios and also not universally applicable. Some states have restrictions on what your credit score can be used for and how it can impact you, car insurance and rentals being a prime example.

Also, by simply having a credit card (and not using it!) and not having any lapsed debts (collections or reported unpaid bills) you will easily have a score in the mid to high 700s. If you carry a balance month to month but regularly make your minimum payments you will have a credit score in the low to mid 700s. Hell. my wife had 5 bills in collection and still had a 650 before I met her.

As far as credit score applicability, it's often referenced by businesses as a measure of risk. If you have a 650 instead of a 750 your car insurance might be higher because your risk of payment is higher, but we're only talking about 10-15% more per year (US south east). Same with with rental, if you have a bunch of bills in collection or default your score will be bad, but a rental provider will be less willing to provide you service if you have a history of not paying your bills. You should still be able to find a place to live, but it will likely be more limited (for example if you have a 400, but not if you have something like a 650) or you may have a larger security deposit.

Overall your credit score likely won't be an issue 95% of the time, but if you habitually don't pay your bills then your score will go down and businesses that check your score won't want to do business with you. I can't make this clear enough, you have to be deliberate in your actions if you want your score to be low enough to cause a problem. My wife had $15k in student loans, $10k in credit card debt, and 5 unpaid bills that had been sent to collections and she still was in the 600s. The score system exists for a reason, I would argue that it should be a bit more forgiving, but the reason it exists is fair.

Non US citizens might have trouble relating to this, but people in the US take blatant advantage of systems a lot of times. I have a coworker that moved for a new job, but he didn't want to sell his house because he got it at a good rate and time. He listed his house for a decent rate and his first tenant stopped paying after the second month. He waited until 4 months hadn't been paid to take them to court and it took another 6 months to have them removed. Just before they were going to be escorted out by the sheriff they paid him the entire back rent in cash to try to prevent the eviction (they had the money the whole time!) After they were evicted he reached out to the local municipality for the water account and they found out the tenant had bypassed the water meter (basically they were stealing). The municipality then said he had to pay to fix the bypass, penalized him for the stolen utilities, and said that for any future tenants he would have to keep the account in his name rather than having the tenants file it.

American credit score systems suck, but they are generally fair and they prove themselves necessary because a certain percentage of Americans seem to have fundamental problems with following common and decent rules of this world.

I just read an article the other day that said Gen Z has the highest rate of credit card fraud ever seen in US history. As a group they just don't see any issue with ordering something online and then saying it never arrived and reversing the charges. I'm all for saying fuck the system and down with corporate interests, but it's hard to have a functional modern society that casually commits fraud and theft.

Im considering it as well. but the question is before I begin would be that a diet of only radishes everyday can prevent scurvy, if so im all aboard.

Real animal crossing strategies

It was never a system that existed to just verify the ability to get a loan. Banks were the ones who did that.

The credit score was always a measure of how individuals took on an paid off debt in a way that the creditors wanted for maximum profits. That's why it wasn't something individuals even had access to until they came up with a way to have people interested enough that they would pay for the privilege of being able to see their personal debt monkey score.

It has always been a shit system for the average person.

Your ass is speaking truth

There must be something else to it. I've never paid any interest on my credit cards and I paid off my mortgage early; by your logic I should have a low credit score, but it's actually in the "Excellent" range.

Paying back a loan quickly will not lower your credit score. If you have a line of credit that closes as soon as you pay off a loan (eg a car loan) your score can go down if it changes your utilization rate (how much you could take out in loans vs. how much you have taken out) but paying off a loan early won't impact your score.

You can look up what things are factored into a consumer credit score. You can see for yourself that early payments are not part of the formula.

I always pay my loans back on time and every now and then the bank rise my credit limit. I think it's because I also have a bank account with them and they can see I have the money ready to go. I don't make much money for them, but I do make a consistent amount and the banks like that too.

Credit scores are used to tell companies how much they can earn on lending you money.

This is demonstrably bullshit.

Someone who maxes out a credit card, and then only pays minimum payments, and always makes them late, is, via interest accruing and late payment fees, making the lender basically the maximum amount of profit possible. And yet doing this will result in a garbage credit score, because using every penny of your credit limit is very detrimental to your credit score, and not making payments on time is extremely detrimental to your credit score.

Meanwhile, take me, someone who never pays a cent of interest, because he pays off his card every statement cycle (and on time, naturally), and because of card rewards, I’m the one profiting, the lender is literally the one paying me, and ‘yet’, my credit score is in the 800s.

So how do you reconcile that with the assertion quoted above? It’s very hard to understand how anyone can arrive at the conclusion you did, while also knowing, at least (as I assume you do), that late payments simultaneously hurt your credit score and increase profit for the lender, just as one example.

Paying back quickly reduces the amount they can earn, lowering your credit score.

Straight-up lie false.

The way I understand it, to raise your credit score you need to slowly pay back your loans, so you pay back maximum interest.

You don't understand it.

The way I understand it, to raise your credit score you need to slowly pay back your loans, so you pay back maximum interest.

I got an 800 credit score by just using credit cards and paying the balance each month. Lenders made literally no money on me.

Hmm, I don't think so. I'm in my 60s and I've always paid my credit cards in full each month when they're due. Until very recently, I did have a mortgage and paid the regular payment (with occasional extra payments for principle), do they did make money off of me there. My credit rating has pretty much always been at or near the highest it can be.

You are entirely incorrect. The credit card company makes most of their money from the fees paid by the merchant. They make money when you, the customer, spend money because the merchant gives a chunk of it to them, usually with an additional flat fee. (Different merchants and card processors have different payment structures. A grocery store is more likely to pay a much higher fixed daily fee to avoid unpredictable transaction fees on small purchases)

They don't lower your score if you pay back early. People get confused because they see their score drop after going from $10k credit card limit with $800 in monthly usage paid on time every time and a $500 balance on a $25k car loan that's been paid on time every month to just the credit card. The reason it went down is that the number of regular timely payments went down, which means fewer trust signals, and credit utilization went up. (3% to 8%). It doesn't however snap down as though you hadn't just made a bunch of good payments, it just doesn't boost when you're done.

The credit card company makes the most money when you make a huge number of modest purchases and then immediately pay them back. When you have credit card debt their money is sitting in the merchants account. They want to minimize the time they don't have their money so they charge you based on the risk that you never pay them back, after a grace period. (You have usually a month before any interest acrues).
It's why as you get better credit scores the credit card company starts offering you increasing incentives to buy things. Bonus cash back on purchases at places that tend to be frequent, smaller purchases without bulk processing rates and so one. They'll refund you on purchases in a dispute with the merchant and then figure out the merchant dispute independently (usually by just dropping it because they don't care about $124.99 in potentially substandard curtains or whatever they just want the customer to keep buying curtains and the merchant to keep thinking it's a net positive). You're a walking $0.25 + 3.0% per purchase. Making you regret spending money is the last thing they want.

I'm Australian, and this post prompted me to research the US Social Credit system. The score can determine whether or not you're accepted for home rentals, and even determine whether or not you qualify for medical treatments

You need to engage in having debt and credit in order to appease the score.

I bought an apartment recently, and I've never had a credit card or debt of any variety. When I was younger my bank would dip into negatives or reject a payment fairly regularly. In the US that could probably cost me a place to live.

And apparently the entire credit score is built up and perpetrated by these massive corporations? Like Credit Score is not even anything to do with the government, and yet it has such a pervasive effect on people's lives and their behavior.

It's straight up creepy. Dystopian vibes. How do Americans tolerate this?

Remind me, were we supposed to be disgusted and afraid of the Chinese social credit score system because it included woke BS like how nice you are to others, and how things you do improve society, rather than just laser-focusing on the only important thing— whether your existence can be monetized by rich assholes?