25 years old and deep in debt

[garbon]

Strangely, as far as I know, my credit score has never mattered to me in any way. Maybe it did out of my knowledge. I have no idea what my credit score is.

Sadly I actually have no idea. I've only known in on occasion as I've had to submit it for rental applications.

edit: Actually I don't know that I've ever known my credit score, only just seen my credit report!

[garbon]

Or you could just make purchases on your credit card(s) that you could already afford to pay.

Yes I am going to take out a super high interest loan unnecessarily!!111

So responsible, hire this person immediately!

[crazy canuck]

Strangely, as far as I know, my credit score has never mattered to me in any way. Maybe it did out of my knowledge. I have no idea what my credit score is.

That is perhaps because your family income is in the sort of range that even if you had no credit history nobody would care and if you do have a credit history it is most likely excellent.

[DGuller]

Absolutely true. If your score is high, it has little to do with you paying your credit cards off each month and probably everything to do with a car loan (debt), a mortgage (debt), or a student loan (debt) that you've carried and paid on each month.

I had a score of 790 before I had any of those things.  Since then the only debt I ever had was a car lease, which I think counts as a car loan.

[The Brain]

I borrow cars sometimes.

[Malthus]

Strangely, as far as I know, my credit score has never mattered to me in any way. Maybe it did out of my knowledge. I have no idea what my credit score is.

Sadly I actually have no idea. I've only known in on occasion as I've had to submit it for rental applications.

edit: Actually I don't know that I've ever known my credit score, only just seen my credit report!

The people I rented from for a decade before buying my house would not have known what a credit score was, and they certainly did not ask us to submit any - in fact, we never signed any sort of contract with them: handshake only. They were a very naive (if lovely) old Ukranian couple, who mostly rented to us because they could talk to my wife in their language.

We did borrow a lot of cash from my wife's credit union when we bought our place, but they were not concerned about the risk because we were paying half down. We were able to negotiate a pretty good deal, and they never asked us to produce credit reports.

I've never leased a car - we always buy.

[Jacob]

They don't ask you to produce a credit report; they just check automatically as they process your loan application.

[merithyn]

Strangely, as far as I know, my credit score has never mattered to me in any way. Maybe it did out of my knowledge. I have no idea what my credit score is.

That is perhaps because your family income is in the sort of range that even if you had no credit history nobody would care and if you do have a credit history it is most likely excellent.

Credit scores are for middle-class and poor people.

[HVC]

And develop no credit. Besides it isn't like you have interest if you pay off your monthly balance.

And that barely helps your credit. In order to build credit, you have to carry a balance and pay monthly. To pay it off each month doesn't help your credit much at all.

Not true at all.

Absolutely true. If your score is high, it has little to do with you paying your credit cards off each month and probably everything to do with a car loan (debt), a mortgage (debt), or a student loan (debt) that you've carried and paid on each month.

are credit scores really that different down there? Mortgages don't count here and you score goes down if you carry a high debt balance.  Don't know if student loans show up, never had one.

[Malthus]

They don't ask you to produce a credit report; they just check automatically as they process your loan application.

Makes sense. As I said, people could be checking this stuff all the time, and I would not know it.

[merithyn]

are credit scores really that different down there? Mortgages don't count here and you score goes down if you carry a high debt balance.  Don't know if student loans show up, never had one.

No, that's the same here, but it's a ratio of debt to income, not an absolute debt amount.

So, if you have $10,000 in debt (not including mortgage), make $100,000 a year, and pay regularly, you have good credit. If, however, you have $10,000 in debt (not including mortgage), make $20,000 a year and pay regularly, your score isn't going to be as high.

Student loans very much show up on your credit report down here. Missing one payment can, in fact, result in 12-15 "slow payment" hits on your credit report; one for each semester loan you took out.

[merithyn]

Absolutely true. If your score is high, it has little to do with you paying your credit cards off each month and probably everything to do with a car loan (debt), a mortgage (debt), or a student loan (debt) that you've carried and paid on each month.

I had a score of 790 before I had any of those things.  Since then the only debt I ever had was a car lease, which I think counts as a car loan.

And you've never carried any credit card debt over from one month to the next? Every single month of your life, you've paid off your credit cards? You had no student loans, either?

[Malthus]

Strangely, as far as I know, my credit score has never mattered to me in any way. Maybe it did out of my knowledge. I have no idea what my credit score is.

That is perhaps because your family income is in the sort of range that even if you had no credit history nobody would care and if you do have a credit history it is most likely excellent.

Credit scores are for middle-class and poor people.

I'm no banking dude, but I suspect the way it works is that credit scores are important if you want to borrow money but don't have any assets to put up as security for the loan.

Once you have an asset (like a fully paid-off house), I'd assume that the existence of the asset is more important than the credit score.

Of course, upper middle class and rich people are more likely to own assets they can use for security. The net result being that, on average, the poorer you are, the more important the credit score.

In my case though, I've gone from being poor to upper middle class, but for various reasons I've never experienced the credit score as significant.

[merithyn]

I'm no banking dude, but I suspect the way it works is that credit scores are important if you want to borrow money but don't have any assets to put up as security for the loan.

Once you have an asset (like a fully paid-off house), I'd assume that the existence of the asset is more important than the credit score.

Of course, upper middle class and rich people are more likely to own assets they can use for security. The net result being that, on average, the poorer you are, the more important the credit score.

In my case though, I've gone from being poor to upper middle class, but for various reasons I've never experienced the credit score as significant.

That's exactly it. Think of it as the "you have to have money to make money" kind of thing. If you have money, then getting a loan is easy. Those who need it most are the least likely to be able to get a loan, because they show as the highest risk.

One more way to keep poor people poor and rich people rich.

[Malthus]

I'm no banking dude, but I suspect the way it works is that credit scores are important if you want to borrow money but don't have any assets to put up as security for the loan.

Once you have an asset (like a fully paid-off house), I'd assume that the existence of the asset is more important than the credit score.

Of course, upper middle class and rich people are more likely to own assets they can use for security. The net result being that, on average, the poorer you are, the more important the credit score.

In my case though, I've gone from being poor to upper middle class, but for various reasons I've never experienced the credit score as significant.

That's exactly it. Think of it as the "you have to have money to make money" kind of thing. If you have money, then getting a loan is easy. Those who need it most are the least likely to be able to get a loan, because they show as the highest risk.

One more way to keep poor people poor and rich people rich.

Hey, it's easy to get a loan if you are poor - at least, so those ads for payday loan places keep telling me. 

But yeah, basically. Banks want to loan money to people who don't need it, because of the risk factor.

There is also this - if you owe the bank $100,000, the bank owns you; but if you owe the bank $500,000,000, you own the bank.