this post was submitted on 21 Feb 2024
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Today I Learned

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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.

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[–] [email protected] 4 points 8 months ago (16 children)

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.

[–] [email protected] 19 points 8 months ago (9 children)

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

[–] [email protected] 8 points 8 months ago (8 children)

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.

[–] [email protected] 3 points 8 months ago* (last edited 8 months ago) (1 children)

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.

[–] [email protected] 2 points 8 months ago (2 children)

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.

[–] [email protected] 1 points 8 months ago

I pay mine every Thursday so it clears Friday and I'm ready for the weekend.

[–] [email protected] -1 points 8 months ago

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

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