You know once you stop giving a shit about your debt score, you find so much more peace.
Why would Obama do this?
Something something, leading indicators…
Is it because they know we’re all about to get sucked by the rise in healthcare prices in 3 months?
I’m doing my part! struggles harder
Yo, leave some struggle for the rest of us.
Maybe people are a bit pissed that they can make years and years of on time payments but then something happens and they miss a payment or are late, they get charged another fee and get reported. Fuck credit scores.
You can carry unlimited loses on stocks and get a tax break. Miss a payment once and get a 45% penalty and unable to get an apartment for 10 years. 🇺🇲🦅
The game was always rigged against us.
Time to move fast and break shit.
The national average FICO score dropped by two points this year, the most since 2009, according to data released Tuesday by the analytics company.
With just this information in front of me – I can’t really tell if this is a statistical outlier.
This admin just reintroduced medical debt to be included in credit scores again, while also restarting student loan collections.
So the data being measured has changed, and also people had a sudden increase in large payments.
Also something of a lagging indicator as you need to actually start missing payments before they fall. And not terribly significant if you were only seeing them shift a few points during the worst foreclosure crisis in US history.
Then there’s another question of their validity in an industry geared towards marketing and sales. Keep in mind that many of the companies with the worst foreclosure rates had AAA credit scores right up until bankruptcy.
Wouldn’t scores fall earlier than that as more people utilized their credit lines and their credit: debt ratio changed? I’m sure the impact is much less than missing payments, but I think that would be an important thing to monitor for trends
Wouldn’t scores fall earlier than that as more people utilized their credit lines and their credit: debt ratio changed?
Assuming lots of people are sitting on lines of credit they’re not using, I suppose. But unless you’re nearing your max your credit score actually goes up if you’re regularly making payments on outstanding debt.
They can also fall for stupid reasons. I recently finished paying off my car and my credit score dropped by 6 points!
That’ll teach you not to participate in capitalism.
This is only a brief fluctuation as the average age of your accounts decreases.
It’s not like they want to punish you for paying off your car.
The reality is that a high percentage of the population loads up on more debt after paying off current debts, so the algorithm reflects that. Usually those points come back after a couple of months.
Not sure about that, but what I do know is that once an account is paid off, it closes and mostly no longer factors in. The fact that you paid it off in full doesn’t matter more than whether you made all your payments on time. An account suddenly closing because it’s paid will affect at least 3 factors of your score:
- average age of accounts could go up or down
- Credit utilization will go up, as the part you had paid off before the account closing counted as “available credit” for some types of debt
- Credit mix: having a variety of types of credit accounts helps your score. If your only account of that type just closed, it will bring your score down
- Number of accounts also matters, and there is a sweet spot for that, but that’s only like 5% of your score
These factors all have different weights and timescales, your score will typically go back to the level it was at before within a few months if nothing else changes. What matters the most is having a long history of on-time payments. The shitty thing is that any missed payment hurts 10x more and will stay on your report for ages. This is all for the US system only, which should be obvious if you’re reading this and not American.
That makes sense, even if it seems dumb to be “pre-punished” for something I’m not planning on doing.
Well.
You can say it hasn’t happened in 18/18 years since it last happened.
My geriatric millennial ass:
My personal scores have increased by about 100 points in the last 6 months (I started getting worried about interest rates getting even worse and consolidated my credit cards under a personal loan with a definite payoff date).
At this point I really don’t care what my credit score is, but this feels like a bad time to have debt, and for once in my life I feel lucky that I’m able to be paying off debt faster than I can take on more - which really hasn’t been the case since I went to university in 2007 (and never finished for financial reasons).
An inflation event is a great time to have debt. The best time to have debt. The money is worth more when you get it, and the debt you owe shrinks in value.
this feels like a bad time to have debt
It’s a great time to have debt. If you don’t end up imprisoned, killed, or a refugee, massive inflation will make repayment easy.
That only makes sense if wages rise to meet massive inflation.
So no, not a good time to have debt.
I too went to university in 2007 and didn’t finish for financial reasons! I had a meager $1500 loan, I couldn’t afford to pay off. Ended up paying through the IRS taking my tax refunds about 5 years. Paid $7000 for a $1500 loan. Fun times.
My credit, is however, still in the shitter. I’ve never owned a credit card. I refuse it.
Getting your credit score up can have benefits. My credit was destroyed after my bank scammed me and I couldn’t pass the background check to rent an apartment. I literally had to bribe a landlord with an extra $1k deposit just to rent an apartment. That’s just one example but there’s many more. The world is increasingly stacked against those with bad credit, and in favor of those with good credit. It really is in your interest to game your score up with a low limit card.
I for sure understand this.
There are a couple products out there that will simulate a credit card, but not actually extend credit that can put you in debt. Depending on how you feel about fintech “banks”, Simple has a product called “credit builder” that works quite well. It’s essentially a revolving secured CC, but to the user it acts like a reloadable debit card.
This is such good advice. I am stubborn about not playing the game with it though. Appreciate your thoughts here though.
If you have a stable job, this is a great time to have debt. The dollar is decreasing in value, so as long as the amount you make keeps pace with that devaluing, the value you actually owe is decreasing.
IF you have a wage that is adjusted/raised at least to inflation’s levels
You don’t want to be in debt when the merry go round stops
I wonder if it had anything to do with fucking up everyone’s student loan repayment plans immediately after taking office
Im sure the sudden restart of payments and people missing it were absolutely a contributing factor
Hey hey, its okay - it’s not AS BAD as the worst financial crisis in our living lifetimes. Things are alright.
Not as bad yet
Prances off singing “I’m still standing”
It’s possibly worse if you take out the AI bubble…And it’s still getting worse
What the hell is a credit score?
deleted by creator
more like some stupid usa-shit
These delinquency rates are “more consistent with an economy in recession than one still in expansion,” FICO said, adding that mortgage and home equity loan delinquency rates are still near historic lows.
I have heard banks have been bending over backwards to allow people to keep up to date on their loans though.
They aren’t. I recently went through fucking hell with my mortgage company trying to figure out a plan to stay, or even just stay until the house sold. They drug their feet and were so incompetent during the whole process and were zero help.
I was there. It wasn’t that great.
I helped!
