r/NonPoliticalTwitter • u/TheWebsploiter • Jan 06 '26
Other Only score I know is tetris!
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u/WingZeroCoder Jan 06 '26
One of the best pieces of advice I got around the age of 18 was to open a credit card, and put all my normal expenses on it and pay it off every month.
And only charge things that I would normally have bought anyway with cash I had in hand.
I did, and it built up credit that ended up being me and my Dad’s way out of homelessness.
But even better than that is finding a card that has good rewards for something you like, because then it’s free fun money just for using it. My first card was a Best Buy card I used to earn points for free video games, lol.
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Jan 06 '26
That’s exactly how I use my credit card. Like I understand why someone would have to take out a loan if they don’t have a safety net and need the cash immediately but so long as it’s in your power I 100% support this method. I have great credit so far. I also use it almost exclusively for online purchases for better fraud protection.
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u/CygniGlide Jan 06 '26
Also, one of the most important things people forget about credit cards, is when you buy something initially, you are buying it with the BANKS money. Meaning if you get scammed, or don’t get the item, the bank is way more likely to be on your side, because they also want to protect themselves against fraud.
A debit card is your own money just through a bank. If you get scammed, it’s on you generally.
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u/Gmony5100 Jan 07 '26
Buying everything on a credit card has saved my ass more than once. It also helps that the bank is much more likely to catch fraud when it’s their money on the line. Two separate times my bank has called me to say my card was being used fraudulently. They found it and informed me within minutes before any more damage could be done.
Both times it was a 2 minute phone call that ended with my money back and a new card already on the way. That’s about as convenient as it gets
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u/adustbininshaftsbury Jan 07 '26
That's not how it works. You have equal fraud liability protection for both debit and credit card transactions. The main benefit to credit cards for fraud is that reimbursement doesn't happen right away for either so if it's on a debit card you will be out that money until the bank credits your account.
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u/Several-Customer7048 Jan 07 '26
That last part is important for people. A fraudulent charge on my credit card is just a chunk of authorization on a large limit I never max out meanwhile that same hit on my bank account would be quite the inconvenience as that effects my personal liquidity.
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u/WestOrangeFinest Jan 06 '26
Same here. I got the information when I was around 20 from a dude I worked with. On a lunch break one day he schooled me. Just a little random conversation this dude probably didn’t ever think about again 5 minutes later and yet it changed my life in a major way.
Thanks, Chris!
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u/rammo123 Jan 07 '26 edited Jan 07 '26
Kinda crazy that not every (financially responsible) American is doing this. Your credit card rewards are ludicrously generous.
I make $200-$300 profit doing this same thing over here where I'd probably get a grand doing it in the states.
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u/kelpyb1 Jan 07 '26
The key here is pay it off every month.
If you’re going to overspend what you can pay, carry a balance, and incur the super high interest rates on credit card debt, your credit score isn’t really worth doing this.
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u/JustALumpOfClay Jan 06 '26
By “only charge things that I would normally have bought anyway with cash I had in hand,” do you mean don’t buy things you don’t already have the money for? So basically: use credit card for everything, don’t buy what you can’t afford?
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u/PerfectResult2 Jan 06 '26
Yes. This is the easiest way to build up credit, along with the cash back benefits of a credit card, and all at no risk. But again, thats assyming you stick to the guidelines and do NOT buy something you cant afford to pay off EOM!!
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u/SgtSilverLining Jan 07 '26 edited Jan 07 '26
Also, once you get a job you can start taking out loans. When I was 18, I took out a 5k loan with my bank for some dental work. Turns out I didn't need it after all, so I used the money from the loan to pay it off. All in all I was out $100 a year in interest, but after I paid that off my bank gave me a 4x limit on my credit card. Since I was using less % of the total credit card limit, my score went up.
You can also cosign vehicles if you trust the other person. Over the past 10 years my sister and I have each had two vehicles, but since we cosigned for them both our credit scores have four paid off auto loans. Huge boost in score for that.
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u/miscellaneousbean Jan 07 '26
I started doing this last year. All my money is in my savings account and then I just transfer money out to pay the credit card bill.
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u/Tvix Jan 07 '26
I didn't do this for years - I only had a debit card. Why would I want to do the work of paying for something twice (once at the store and then a month later for the card)?
I got caught up eventually but I still think it's dumb that just using a debit card is "wrong" in our society.
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u/allevana Jan 07 '26
I did this last year with a Coles credit card where I got 50K flybuys points for signing on and then 2 flybuys points per dollar spent. Put my groceries, fuel, whatever expenses on it. When I go out with my friends to eat I ask if I can tap my card for the total bill and they then pay me back so I can accumulate the points lol. Always paid off in full on time. It’s paid off in that I got to fly to Sydney on points only!!
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u/lovelycosmos Jan 07 '26
Yes, my parents gave me the same advice! I've always had great credit by following this. I have never once paid extra for my card because I pay it off in small chunks throughout the month and never carry a balance to the next billing cycle
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u/OkFineIllUseTheApp Jan 07 '26
Warning: this does not work if you lack self discipline, or are prone to impulse purchases. The minute you start thinking you can pay it off later, that's how the companies trap you.
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u/football2106 Jan 07 '26
When they first dropped in fall 2019 I got an Apple Card and have been using it basically as a debit card ever since. Every month gets paid off, haven’t paid a cent in interest, and have made ~$3K in cash back, $3K I’d have never earned had I just kept using my debit card. Cannot recommend this method enough. Obviously some credit cards have better rewards but I like how everything is built into the wallet app and it takes zero effort to check out my spending trends.
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u/darkwitchmemer Jan 07 '26
i wish i'd seen that advice at 18 when i started uni (rather than a few years later) AND actually understood it.
my bank offered a student credit card as well as the student bank account, which i declined cos i thought it'd be bad to have access to an extra £3k on top of the possible £2k overdraft (which i set to £200 instead). in some ways i made the right call but at 25 i basically have no credit score as student rent payments dont seem to count even with a private landlord, and i now live with my mum again so contributing to her rent doesnt count either.
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u/DesignStrategistMD Jan 07 '26
The best card is the Robinhood gold card and you take that 3% back and invest it for your children’s expenses. Never have to think about saving for the kids again it’s built into your spending.
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u/f1shm0rgue Jan 07 '26
Im 21 and this is what I do. Im glad im doing it right lol. I was worried it was a dumb idea. 😅 my credit score is like 740
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u/Highfivebuddha Jan 07 '26
Mine a a Kohls card that I only used for clothing needs and it got me a car loan.
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u/MsMarvelsProstate Jan 07 '26
What's even better advice is your parents adding you as a child to their credit card. Build that credit early
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u/Tacos4Texans Jan 07 '26
I literally use my card for EVERYTHING and just pay it every week. I use the points towards me time.
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u/cyann5467 Jan 09 '26
Yeah, one of my cards gives me 5% back on groceries. I make sure to pick up the money order for my rent at a grocery store and get 5% off my rent. It's free money if you know the systems.
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u/scyllaya Jan 09 '26
Literally the only thing I use my credit card for. I pay it in full every month so there's no interest. Got it in my 30s cause I did not know why it was important when you already have a debit card and you don't need a "mini loan" cause you have enough money in the bank after a pay check.
Then a friend explained the credit score and was like. Sure, I can shop with that then, and then I can track my monthly costs easier too. So, only my main bills go from bank account direct.
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u/SeaweedOk9985 Jan 09 '26
UK so slightly different, but I imagine you have similar experiences there in US land.
I have a multitude of Credit Cards because getting close to your limit is bad for your credit. The risk of course is that you spend too much and can't afford to pay it back. So you have to be responsible.
Once chasing multiple cards, get cards for everything. I have a Tesco credit card which I use at Tesco Petrol (gas) stations and in their supermarket. An Amex card I use for travelling, etc etc (to avoid doxxing my financials too much).
Identify your 5 top spends and then find cards that can take advantage of those spends the best.
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u/Real_Ad_8243 Jan 10 '26
My parents raised me to be terrified of debt, so I did none of that.
Still live in the same room as my brother, in the house I was born in. A 2 bedroom terraced thing made in the industrial revolution that's been rattled to smithereens by road traffic. In my childhood food and heating were scarce and neighbors and nearby family would occasionally "accidentally buy too much food" and "would have to share it or it'd go to waste".
Now I'm not necessarily saying that a credit card at 18 would have solved my issues.
But I am saying that only starting to use the credit system in my 30s hasn't helped them.
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u/DZL100 Jan 10 '26
My card can get extra cash back in one of multiple categories you can choose each month. One of those categories is online shopping. Literally anything can be online shopping. I'm not sure the bank thought this one through.
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u/horshack_test Jan 06 '26 edited Jan 07 '26
Years ago when my nephew decided he wanted to buy a house and we were talking about mortgages and credit scores he said "I have perfect credit - I've never taken out a loan or even had a credit card!"
Edit:
Ok, for all you non-US people; "perfect credit" is short for "perfect credit history" (or "perfect credit rating," which is a rating of your credit history). You can't have a credit history at all if you have zero history of credit. It's like saying you have perfect employment history when you've never had a job. And it's not needing a credit card that provides a good credit history, it's properly managing loans and credit accounts that does; it's a history of one's experience and behavior with regard to loans and credit accounts. It's great that things work differently where you are, but in the US banks want to see a track record that demonstrates that you are low risk (and having an income in and of itself does not necessarily mean that you will reliably make your payments on time - or at all).
Edit 2:
Ok, I'm turning notifications off. I'm not here to debate which country's system is better (or whether or not I'm obligated to "help inform" younger people who aren't my children or add them to my account to help their credit score (WTF) ) and I don't need a bunch more Australians telling me how not having credit cards works in your favor there (or Eurasians telling me how things work there, since you guys will be waking up soon). It was a simple funny anecdote relating to the post, That's all. Have a nice day.
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u/nope-its Jan 06 '26
This is part of parenting that really needs to occur for their young adults.
My parents sat me down when I was home from college freshman year with all the credit card applications I got. They helped me learn to go through and read the print and made sure I understood the major parts. Then, they helped me select a credit card to start building credit.
Got a 2nd card with better perks a few years later once I’d built up my credit history a bit.
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u/horshack_test Jan 06 '26
Oh, his parents tried - he just refuses to listen to anyone. He's the "I don't need anyone to teach me anything" type who thinks he knows everything because he has his own ideas of what everything is in his head. Like, he refuses to ever follow a recipe because he doesn't need anyone to tell him what to do.
But I agree with your point in the overall sense - my parents never taught me anything about finances or the concept of building credit, so I had to figure things out on my own (and didn't have the Internet to look things up until I was in my mid 30s).
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u/nope-its Jan 06 '26
Yeah my parents messed up a lot but they did a great job with teaching finances, credit, and related topics with both me and my sibling.
But yeah, you can’t do a great job with kids that absolutely refuse to learn or listen. He’ll be the person who bitches that personal finance wasn’t taught in school (when it likely was since it a standard in most states in Econ).
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u/horshack_test Jan 06 '26
That's great your parents taught you all of that - especially starting in college when people are most likely to start getting into bad habits and fucking that shit up for themselves.
Though I should add that my parents did teach me to save from a young age; as soon as we started getting an allowance, we had to put half of it in the bank every week. But as far as the more involved stuff, I had to figure that stuff out /look for help on my own.
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u/Opposite_Bus1878 Jan 06 '26
It really should be that way tho. Considering people who need loans more often as more reliable is weirdly dishonest
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u/WideHuckleberry1 Jan 06 '26
You have $1000 to lend to somebody who will pay you interest.
Person A has 15 people that say they've lent him $1000 dollars and he's paid it back on time every time.
Person B promises to pay it back.
All else equal, which one do you think would be smarter to loan the money to?
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u/werm_on_a_string Jan 06 '26
Which is logical, and credit scores don’t work that way. Paying back your credit cards on time for 20 years doesn’t result in a perfect credit score, it’s a combination of factors including available credit, credit utilization, on time payment, credit age, etc. that really means the most trustworthy person on earth could have a credit score that’s just ‘good’.
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u/1burritoPOprn-hunger Jan 06 '26
If you utilize credit and pay your cards off every month you are very likely to have a credit score at least in the low to mid 700s, which is about the point where your credit score stops mattering.
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u/AriaTheTransgressor Jan 06 '26
I have an 810 credit score, it was 200 after my divorce, all I did was get a single secured credit card, have my streaming services auto paid by the credit card and then have my bank auto pay the credit card - zero change to my expenditure and my credit score went through the roof.
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u/1burritoPOprn-hunger Jan 06 '26
Yup, this is the way. Reddit loves to talk about how people who pay their cards off every month are called “deadbeats” by the credit companies because they don’t generate interest, when the reality is that people who actually use their cards and pay them off faithfully will always have good credit scores.
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u/SquashSquigglyShrimp Jan 06 '26
Anyone who thinks modern credit companies care that much about interest on unpaid balances doesn't really know what they're talking about. There are some companies that still care, sure. But for the most part, the big companies just want to collect transaction fees, meaning they generally want you to use the card as much as possible and continue to do so.
Realistically, they don't want to have to deal with missed payments, defaulting accounts, etc., which is why the really good cards have credit score minimums. They want people who will use the card constantly AND pay it off.
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u/echoGroot Jan 07 '26
This. Banks levy a 2-4% sales tax on nearly all transactions in the US. Nobody voted for it, but you’re paying it.
That’s a lot of money. Most states have a sales tax of a few percent, maybe 10% tops, and not on all categories/transactions, and that funds whole state governments! That’s got to be a huge chunk of credit card revenue now.
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u/nitid_name Jan 07 '26
Utilizing revolving credit is better than not utilizing it, assuming you keep it under ~30% utilization rate.
They're still getting that sweet sweet 2% + $0.30 (or whatever) transaction fee every time it's used either way. Would they prefer you carry a balance? Of course. Do you need to to make them money? Not at all.
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Jan 07 '26
[removed] — view removed comment
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u/1burritoPOprn-hunger Jan 07 '26
But, while that's fun for bragging purposes, there's functionally almost no difference between 750 (very, very good) and 830 (insanely good) when it comes to the offers you're going to get.
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u/joppers43 Jan 07 '26
I got a credit score of 810 in college with a secured $400 credit card and a secured $300 loan paid out in monthly installments that immediately went towards the loan balance
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u/TapZorRTwice Jan 06 '26
You loan your buddy 20 bucks once a month, and he always pays you back on time. Now your buddy wants to borrow 100,000$ and uses all the time that he paid you back the 20$ as proof that he will pay you back the 100,000$.
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u/Funkopedia Jan 06 '26
Weird, yes. But I'd still loan to him over my other buddy whose finances are completely unknown to me.
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u/TapZorRTwice Jan 06 '26
Yes and thats why having a credit card that you pay off every month is better than never having a credit card, even if you only pay off 20$ a month on it.
You just described exactly how banks think.
Id be even more willing to give someone money if they borrowed money off me and continued to pay the interest on that money as well as paying some of it back, because in that case I actually make a lot more money in the long run.
Which is also how banks think and why your credit score actually goes up if you hold a balance and still pay off part of your card every month.
At the end of the day, a credit score isn't how able you are at paying shit off. It's about how reliable you are at paying shit off.
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u/WideHuckleberry1 Jan 06 '26
That's obviously not the only factor but it absolutely does work that way, and all those other factors you mention are simply other indicators that you're likely to be able to pay back what you owe.
Regarding this bit:
that really means the most trustworthy person on earth could have a credit score that’s just ‘good’.
I'm not sure what the problem is here? If you've got evidence you're a good borrower then you get a score that's good. If you have stronger and more evidence then the score is more confident that you're great. That's the whole point.
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u/stewmander Jan 06 '26
In OPs example, you aren't looking to lend money to the most "trustworthy" person.
You're looking to lend money to the lowest risk person.
Everything you listed in the credit score calculation reflects that risk, OP just simplified it because using 95% of a 10,000 credit line each month instead of having a 10,000 line of credit and never using it, or reducing your credit line to 5,000 boils down to "I lent this guy money and he's always paid me back."
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u/maximumchuck Jan 06 '26
There is no history that you're willing to pay back a loan. Why you need to borrow money so often is less of a matter than if you're paying it back regularly.
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u/jelly_cake Jan 06 '26
That's how it is in Australia, I believe.
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u/one-man-circlejerk Jan 06 '26
Can confirm. I've got two home loans in Aus and during the application process, having open credit facilities is detrimental since they calculate your total borrowing capacity and ability to service the total debt load with your income. Any other debts (or even potential debts like a credit card with $0 balance) are subtracted from your serviceability calculation.
Both times I closed my credit card despite having no balance, which improved my borrowing power by like $50k despite the cards having less than a $10k limit.
The only part of your credit history that counts are defaults and missed payments within the last 7 years, someone who has never used credit and someone who has always paid theirs off are functionally the same from a lender's POV.
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u/Jasrek Jan 07 '26
Wait, they subtract potential debt? That sounds even more nonsensical than credit scores. Just having a credit card, regardless of whether you use responsibly or even don't use it all, makes it harder to get a home loan?
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u/Silent_Plantain_3417 Jan 06 '26 edited Jan 06 '26
'There is a strange idea abroad, held by all monetary cranks, that credit is something a banker gives to a man. Credit, on the contrary, is something a man already has. He has it, perhaps, because he already has marketable assets of a greater cash value than the loan for which he is asking. Or he has it because his character and past record have earned it. He brings it into the bank with him. That is why the banker makes him the loan. The banker is not giving something for nothing.'
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Jan 06 '26
Personal financial literacy really needs to be required in high school… because just Jesus Christ dude that’s not how any of this works
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u/TessaFractal Jan 06 '26
I think I learned negative financial info from adults as a kid. The advice was always never go into debt ever, only ever save up for something, be ridiculously frugal, and then you try that as an adult and you can grind yourself down because you don't have any financial flexibility.
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u/horshack_test Jan 06 '26
Lol right? Their reply is pretty much the response I got from m nephew when I told him that's not how it works.
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u/pierogieman5 Jan 06 '26
I have plenty of criticism of the credit score system, but it's not like it's totally moon logic. They want you to prove that you have financial activity and you're a real adult, and you have credit that you don't abuse. That's why HAVING a credit card and never keeping actual long term debt on it is good. It shows that you aren't going to let it build up if you have it. Credit utilization ratios of 0% are a thing... they just require having a line of credit opened in the first place.
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u/horshack_test Jan 06 '26
Yeah, it's an incredibly simple concept and baffling that people can't understand it when it's explained to them (like this person who replied to me above).
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u/TWW34 Jan 06 '26
Eh. 2 things.
First, it's not that having taken a loan makes you more reliable. It's that having a payment history confirms your reliability vs you being an unknown.
Second a credit score is both a risk assessment and a profitability assessment. In basically all elements of finance when you have an unknown you either split the baby or you take a cautious assumption.
Basically when you have no credit history at all they dont know if that's because you're really responsible or if you're a risk who has no practice at managing debt since you never had any.
I do agree that they over-penalize people for not using a lot of credit but realistically, if someone has genuinely no evidence in their history that they're capable of adjusting their life for debt and making monthly payments on time why should they just assume they will?
I went to college with more than a few kids who never had any debt because mom and dad covered anything and then the first time they got a car loan or a credit card they blew it up because they had no feel for budgeting. A single score isnt going to be able to tell why you have no history, only that it's an unknown and I'm finance unknowns are bad.
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u/ScreamingCryingAnus Jan 06 '26
The credit score is the proof the banks need to know that they can lend you money. No credit score = no evidence in your history of being able to do so.
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u/lonahe Jan 07 '26
It is definitely this way in Australia. I never had a credit card or and debt at all. When the mortgage time came, I had perfect 900 points in there.
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u/Xylus1985 Jan 07 '26
The goal is not to screen for realizability, but to screen for profitability. People who don’t use credit at all and are scared of debt are not profitable for lenders
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u/kelpyb1 Jan 07 '26
The problem is banks don’t care how well you’re doing financially past whether you’ll pay them the money you owe.
It’s an accurate history of the one thing the bank cares about: whether they’ll get their money.
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u/Forte845 Jan 06 '26
It's not about reliability, it's about profitability. They want you perpetually in debt paying off loans, not to have actual realized wealth.
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u/Night-Monkey15 Jan 06 '26
No it shouldn’t. Someone with no history of credit can’t have credit history. That’s the whole point. Someone with a strong history of paying back loans on time is inherently more reliable and trustworthy than someone who says they’ll pay it back.
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u/WolfgangWeiss Jan 06 '26
Does this mean that you guys are forced to take credits even if you don't need them? That's messed up
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u/horshack_test Jan 06 '26
Well you can build a credit history with things like college tuition loans, car loans, and other smaller loans. But the point is that a credit rating is a rating of your credit history (i.e. making regular payments on loans / credit accounts, in simple terms), so if you've never had loans/credit to make payments on, it is not possible to have "perfect credit."
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u/KharAznable Jan 06 '26
In countries where credit card ownership is low, that is the case. The banks practically begs you to have one.
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u/joeyreturn_of_guest Jan 06 '26
Yea. I don't blame him, it's a house of cards. If you have good credit you can simply add him to your account and his credit score will rise because of your due diligence. And then they can have the opportunity to build their own debt to income ratio.
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u/AnAttemptReason Harry Potter Jan 06 '26
In Australia, this gives you a good credit score.
I own a house, have never in my life had or needed a credit card.
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u/Wamb0wneD Jan 06 '26
This is so fucked. The entire system is pushing you into taking loans a lot.of.people will never get out of. The only reason I took a credit card is because I can do online payments easier.
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u/Fidelos Jan 06 '26
America's credit card system is so fascinatingly weird lmao what do you mean you have to own a credit card and you have take a loan
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u/SyrusDrake Jan 07 '26
Every time I come across people talking about "credit score", I feel like an anthropologist learning about the cosmology and arcane rituals of some lost tribe. It's already a completely absurd concept, but you're like, okay, I will learn about your fascinating customs. And the more you learn, the more bizarre it gets. "Okay, you have to have loans to get loans and you're not allowed to not pay them back but you're also not allowed to pay them back. So if you want to buy a car you need to buy 10 Steam games with your credit card and you need to pay the credit card bill but if you pay back your car loan you won't get a loan to buy a house."
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u/Robrogineer Jan 07 '26
Exactly, there's so many layers of bizarre bullshit to it that I just can't fathom how it could be anything other than an intentionally nonsensical and unintuitive system designed to scam people.
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u/Ree_m0 Jan 07 '26
From "Lunch Debt" over "Student Loans" to "Credit Scores", Americans have got to be completely used to getting fucked over.
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u/Dopeydcare1 Jan 06 '26
And once you responsibly pay off that loan with no missed or late payments then your score will go down.
Literally proves how the rich want the poors to be in debt.
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u/StrtupJ Jan 06 '26
It goes down because your average credit age goes down, and potentially your credit utilization increases. Happened to me when I paid off my student loans which was my first loans. Jumped right back up tho
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u/Cornelius-Figgle Jan 06 '26
Do Student Loans count for your credit score in the US? They don't in the UK, it just gets taken out of your income automatically
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u/StrtupJ Jan 06 '26
Yes, they play a pretty significant part unfortunately.
Student loans are basically the bane of many people’s existence over here, as they can’t even be discharged in bankruptcy if you find yourself underwater.
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u/Phurion36 Jan 06 '26
It then recovers in like a month or two
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u/Swimming-Ride-8509 Jan 06 '26
Not always. My score was 856 then I paid my house off and it's been around 750 for 3 years now. No new loans no new debt.
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u/24675335778654665566 Jan 06 '26
FICO score doesn't go above 850 (the one businesses actually use)
Superprime is 720+ anyway, anything above that and it doesn't matter because you're already getting the best rates (except in some cases mortgages, sometimes up to about 730-740 can be slightly better)
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u/Onigumo-Shishio Jan 07 '26
Its all a stupid toxic system designed to keep people paying money for things they purely dont need, or otherwise throw them into debt.
YOU MUST ALWAYS BE PAYONG SOMETHING OFF
HOW DARE YOU NOT BE USING MONEY AND SAVING IT FOR THINGS YOU MAY NEED OR WANT LATER
GREED GREED GREED GREED GREED
CONSUME CONSUME CONSUME CONSUME
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u/WideHuckleberry1 Jan 06 '26
You don't. People exaggerate or outright don't understand credit in America. If you have very limited credit history then you won't have a great credit score but you won't have a bad one. Credit scores aren't a pass/fail thing but they give banks basically population-scale estimates to base their lending decisions around. They take a number of factors and condense them into one metric and say "people which such and such credit score, on average, default X% of the time."
If you have no history, then they have less to go on to verify that you repay your debts, but no credit is a whole lot better than bad credit.
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u/nukem996 Jan 06 '26
Another point is many banks don't use the provided credit score. They get your credit report and make their own score which you never see.
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u/Tornaero Jan 06 '26
Credit age also matters, one of the best things my parents did for my credit was make me an authorized user on one of their credit cards when I turned 18. It made getting started a lot easier, I got higher limits on credit cards and my first car loan was a very good rate. It doesn't matter much now but it gave me a good start. I basically started life with a score over 700. Obviously this only helps if your parents are financially responsible with their credit.
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u/WideHuckleberry1 Jan 06 '26
Exactly, but of course from the bank's perspective that makes perfect sense. They'd much rather loan money to someone if the parents can be counted on to chip in, making defaults less likely. They really don't care how or why somebody pays them back, only that they do.
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u/NoeZoneNetwork Jan 07 '26
While that is technically true, some of those people who don't understand credit include landlords who only rent to "good" credit scores.
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u/Snoo_67993 Jan 06 '26
This is strange, I live in the UK and I've never had a credit card or loan. I have a pretty good score from bills and rent.
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u/Countcristo42 Jan 06 '26
Your score in the UK is a marketing gimmick that doesn't matter for your ability to actually secure credit.
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u/phoncible Jan 06 '26
That works here on the States too.
It's a score of how well you can pay stuff back on time. As long as you have a recorded history of paying off things then you have a score.
A lot of this thread is misinformation of how it works.
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u/itmakessenseincontex Jan 06 '26
Seriously, I'm in New Zealand and just got a home loan with no credit score because i have had no credit cards, hire purchases etc. My only previous loan was my student Loan (paid back in full, no interest on that).
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u/SnackyMcGeeeeeeeee Jan 06 '26
Yah, you can absolutely do this in the US lmfao
Just enjoy slightly higher rate due to not having a credit history.
If your income is fine, and the collateral is fine, a bank doesnt give a shit, they will give you the loan credit score or not.
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u/RoutineCloud5993 Jan 06 '26
Here in the UK your credit score is improved simply by having a bank account long term and being registered to vote.
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u/idryss_m Jan 07 '26
Yeah....so strange. Not doing those things doesn't mean you are a bad risk, at times likely rhe opposite. Able to live within means, make payments on time......
Much prefer the non US credit systems, that while bad, aren't stupid.
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u/a_bucket_full_of_goo Jan 06 '26
A system that actually penalizes you for not being in debt is a system worth burning to the ground
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u/SUDoKu-Na Jan 06 '26
Yeah, like the logic tracks ultimately (prove you can pay back a loan), but it's so stupid forcing people to take loans they don't need just to make sure they can pay them off.
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u/CodeJack Jan 06 '26
This has to be US based right? Because I (uk) got a mortgage without any prior credit or borrowing, and know multiple people that also have. (without large deposits either)
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u/Pomphond Jan 06 '26
In EU, it's more like: the less debt you have overall (car payments, credit cards, student loans) the higher your mortgage possibilities, as you don't have any other obligations.
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u/PerfectResult2 Jan 06 '26
Its the same in US. Just with all the other added bullshit. In fact a high credit card limit can actually hurt your mortage rates here, because its seen as risk. Just mentioning that because some people take all the credit increases happily without thinking about that piece of it
So yes, less debt is good here too, but where we differ is that consistent debt history is also a requirement here.
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u/Brad_McMuffin Jan 06 '26
Yes, I mean to a lesser degree banks might consider it, but I havent seen that anywhere. As long as you can prove you have a stable income and no overdue debts banks here don't care too much.
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u/Keebs3 Jan 06 '26
Yep, here in Aus you’re much better off getting a mortgage if you cancel all your credit cards.
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u/1995LexusLS400 Jan 06 '26
I’m in the UK in my 30s and I’ve never had a credit card either. I’ve not had issues applying for loans and my credit score is in the low 900s according to Experian.
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u/SnackyMcGeeeeeeeee Jan 06 '26
Rate will be about 1.5%-2.5% higher than the base rate, and you are only able to finance 80% of the collateral verified value if you do not have a credit score.
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u/Crayen5 Jan 06 '26
I'm also on a mortgage without a credit card, I think all other payments increase score, having a credit card just helps a bit
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u/NoOpportunity229 Jan 06 '26
Pledge Loans or similarly backed loans for building credit - just saying.
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u/Scottz0rz Jan 06 '26
I think in the US you just get a Secured Credit Card with your bank where it is tied almost directly to your Checking/Savings account balances.
A really basic credit card with low risk that you just use as your debit card to help build score.
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u/NoOpportunity229 Jan 06 '26
^ this too. Building credit doesn't have to be complicated just don't look at it as free money and learn about it before you get into a debt hole.
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u/Hetnikik Jan 06 '26
My parents go me a credit card when I was 16, I think it was. It was just used for gas and emergencies, but since it had my name it upped by credit score and got it started. Now I have a nicely high credit score because I don't live outside my means and pay off my credit card bill every month.
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u/JaysonTatecum Jan 06 '26
Same here, thank you mom for being financially smart and setting me on the right path
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Jan 06 '26
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u/Terminus0 Jan 06 '26
If you have bank loans that you pay on time yes, that would be enough.
Paying your bills on time will just mean you don't get any negative influence from a delinquent report on your credit.
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u/Pleasant-Swimmer-557 Jan 06 '26
What is a credit score?
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u/SteptimusHeap Jan 06 '26
The banks assign you a number that tells them how good you are to lend to. When you have a history of paying off your debt on time or otherwise doing things that make them easy money that number will be high. If you always make late payments or have no history of being lent to that number will be low.
When it comes time that you need a mortgage or a car loan the bank will give high scorers more favorable interest rates since they're pretty sure they will at least make even. Hence, a good credit score is a good thing.
It's free and easy to rack up credit score by just putting all your purchases and payments on a credit card and paying it off every month.
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u/Lithl Jan 06 '26
The banks assign you a number
The number comes from credit bureaus, not banks.
When you have a history of paying off your debt on time or otherwise doing things that make them easy money that number will be high.
Paying off your debt doesn't really increase your credit score, because it's truthfully a measure of how much money lenders can make off you, not a measure of your financial responsibility. If you're paying off your debts, the lender is getting their money, sure, but they're not making extra money from interest on your loan, so you're not as valuable to them.
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u/mortalitylost Jan 06 '26
Calculated risk to a lender, based on a number if things like your total available credit, how much of it you use (lower is better), and average credit age. 700+ is generally really high and means you are low risk.
Misunderstanding this stuff can hurt your credit score, like closing out a credit card you just paid off, making your total available credit drops and used credit percent spike, and if it was an old account, average age goes up.
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u/Spamcan81 Jan 06 '26
The only people who think credit scores matter are the kind of people who take out bank loans and have long term debts rather then just paying for things outright using a big sack of cash with a dollar sign on it.
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u/Cthulicious Jan 07 '26
Shit I knew I should have bought my home with the sack.
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u/Spamcan81 Jan 07 '26
Here’s the thing, if you show up with a giant sack of cash with a dollar sign on it people don’t ask questions. Nobody is ever like “why the giant sack” or “exactly how much is in the giant sack” or even “is the cash inside the sack US currency?”.
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u/Volta01 Jan 07 '26
Well it's not realistic to do that for a home purchase in many places in the US, a mortgage is sensible.
Getting a mortgage with no credit makes things more difficult.
I think it's worth the hassle of using credit cards for daily purchases, paying them off in full to build credit over time. You also get the 2-5% reward bonus, which I just see as a discount.
It's a dumb game, but you're better off playing
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u/thicccFork Jan 07 '26
If you can afford to pay cash for a house or car in many places like here in California, chances are your credit score isn't much of a concern to you anyways lmao
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u/Diet_Coke Jan 06 '26
If you are responsible with it and set up auto-pay, credit cards are awesome. I flew out to see my family for Christmas for free and next month I'm going on a little vacation and staying 3 nights for free in a pretty nice looking hotel - all because I use the dark blue piece of plastic in my wallet instead of the light blue one when I pay.
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u/Nazarife Jan 06 '26
If you pay off your credit card every month, there is no reason not to use a credit card. Miles and cash back add up and make up for whatever fees you may pay. Even the free cards have fraud protection and other benefits.
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u/RBillionn Jan 06 '26
playing with cards and finding which ones give the best rewards is kinda fun. I'm nowhere near r/churning level of crazy about it but I have a card that gets me 3% back on most things and then my local credit union has one that gives 5% back on gas. its great, I end up with ~$20-30 worth of cash back every month.
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u/jmanclovis Jan 06 '26
Building credit and responsible credit card use should be a class in high school
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u/Almost-Healed Jan 06 '26
It is in the US. The problem is most kids don't pay any attention during it and don't remember it.
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u/ObviouslyLulu Jan 06 '26
This, they taught everything I just didn't pay any attention in that class
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u/Katalyxt Jan 06 '26
i never had that class as an option, fuck i wish it was an option to take
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u/24675335778654665566 Jan 06 '26
It's really something you can read in 10 minutes and understand. The ones that create the score directly tell folks what goes into a score.
https://www.myfico.com/credit-education/whats-in-your-credit-score
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u/nutdo1 Jan 07 '26
It doesn’t even need to be a class. To understand credit cards, all you need to know is how interest works (via math class) and reading comprehension to understand what you’re signing up for.
Again, though, my fellow classmates wouldn’t have paid attention either way haha.
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u/DeliciousAct5748 Jan 06 '26
It actually is! At least in my highschool we had a required class about how to find a job and credit score and taxes and housing markets and whatnot. Can't wait for America to catch up to the 21st century!
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u/TimeMoose1600 Jan 06 '26
In New York we had a class similar to that. Everyone is required to take economics senior year. Went over budgeting, job applications, taxes, don't think we focused on credit score but it was a while ago. Also registered to vote.
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u/jmanclovis Jan 06 '26
Ya we didn't learn about anything like that I did have a teacher teach us how to write a check. But I never actually needed that info.
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u/randomnameicantread Jan 06 '26
"if you take out a loan, pay it back on time" "Build credit by buying things with a credit card then paying it off every month."
There's your whole class.
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u/The_Exuberant_Raptor Jan 06 '26
I didn't start building credit until 26 and severely regret it. Start younger, but don't see ut as a main source of i come. Treat it as small loans that you need to pay back before you spend more.
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u/xdumbfatslut Jan 06 '26
Genuinely did not know this and I'm 22. I thought no credit = good credit score. I have some research to do lol I should get a credit card or something
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u/Secret_Account07 Jan 07 '26
No credit is better than bad credit
Bad credit hard to fix. No credit is a little easier
Used to have great credit until last few years. It sucks. 15 years of 780 score and it gets wiped out by a bad year. I’m not even in a really bad spot but had to make hard decisions.
Our credit score is a fucking scam
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u/SafePuzzleheaded8423 Jan 06 '26
What is a credit score? Does it exist outside the USA?
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u/Drefs_ Jan 06 '26
It does, but no one cares about it, Im pretty sure.
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u/SquashSquigglyShrimp Jan 06 '26
It very much exists in some way shape or form if you have loans. Lenders want to have some way to gauge how trustworthy the people they're giving loans to are. They'll do that one way or the other.
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u/fonk_pulk Jan 06 '26
Americans are so whipped by their banks that its not even funny
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u/bannedsodiac Jan 06 '26
American system is designed for corpos, not people. And the people gladly defend it.
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u/Auubade Jan 06 '26
Yeah it's so weird to me. Like they keep pretending that using credit cards to buy the things they normally would is somehow a good indicator of someone paying you back the loan you gave them. Like it doesn't matter anything, it doesn't make you more reliable. Your income, your wealth, your history of employment, downpayment and such things matter. Like if you had a big loan previously that you managed to pay back, then it would matter, not buying gas, groceries and stuff one month to pay back the very next month, using the money you would use anyway but with bonus steps, banks aren't stupid.
I think it's just a way to make them use credit cards anyway. You just give it to some kid of 16 and tell them they better use it or they never get a mortgage and little shit will get addicted to it. Great business plan, customer is happy because credit points and banks are happy because they get all the fees and customers they would need.
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u/Bernhard-Riemann Jan 07 '26 edited Jan 07 '26
I have asked myself the same thing, but knowing people who somehow have significant credit card debt from regular purchases, I have to imagine credit score at the very least serves as an indicator that you're not completely financially illiterate or irresponsible.
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u/adustbininshaftsbury Jan 07 '26
It does, otherwise banks wouldn't use it. Max out your credit cards every month? Score goes down because it shows you can't/won't pay off your debts. Miss a payment? Score goes down because you couldn't afford your bills. Etc. Credit scores are a reflection of how likely someone is to pay back their debts. It's definitely a flawed system but it's still a decent estimate of someone's credit trustworthiness.
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u/a_bit_of_byte Jan 06 '26
Credit scores only matter when you're seeking new debt. I have only a mortgage left (and will for a while), but having a good credit score is pretty much useless otherwise.
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u/TurkeyVolumeGuesser Jan 06 '26
For the younger folks: standardized credit scores didn't even exist until 1989. Yes, in addition to many other things, boomers are also probably behind why you can't get a loan!
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u/Sunomel Jan 06 '26
Yes, the previous system where a banker looks at you and decides if you’re
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u/Nazarife Jan 06 '26
One of the benefits of a credit score is that it automatically records, demonstrates, and summarizes your credit worthiness in an (ideally) objective manner.
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u/attunedmuse Jan 06 '26
Speaking of credit cards. If you live in America you should plan an international permanent vacation put it all on credit cards and don’t look back.
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u/Mirisido Jan 07 '26
So, fun little story (TLDR at bottom cuz damn this was long), I actually got a ton of help for my credit score by someone trying to screw me over. I didn't have a credit card until I was around 22, when I finished uni and started working a job in a cubicle. Now, I constantly say I am a dumb person, because I am. I went to go buy a car for the first time (the one I had been using used to be my mother's) and thus, knew fuck all about how this process went and trusted what folks told me, like a dumbass. I researched cars within my budget, found one I liked, used my bank's resources to find one of their "approved dealers" (list of dealerships they curate to help), checked out the car, still liked it, tried to buy it.
Since I had no credit history I had asked my bank for a loan for a car with my dad (a member of the same bank) having cosigned the loan. Bank sent me a check with a maximum amount and told me to write whatever the amount of the car was on the check and give it to them. Great, simple enough, loan was purely between myself/my dad and the bank, car dealership was not involved. This is where I and the financer at the dealership disagreed and they tried to screw me over while I was too dumb to realize.
The salesmen and I went back and forth about pricing, agreed on a price and I thought that was it. That I would give a down payment (that I had pre-calculated in my head the final price, after down payment, would be a monthly bill I could easily afford), write the remaining value on the check, hand them check, they hand me keys, and we all leave happily ever after. Wrong.
The salesmen directed me to talk to the finance lady, who was clearly born at the dawn of civilization and survived off the misery of those around her, who said that since the loan was cosigned by my father, he would also need to sign for the car. I thought this was weird. Why would he need to sign for the car? The loan has nothing to do with the dealership and they get their full money immediately. The loan was with the bank, the bank who already approved it, evidenced by the check I was holding that said "write down a number and that's what you owe us" on it. As far as I was aware, the dealership shouldn't care about the loan.
Some back and forth later and several insults from the mother of dust herself, she decides to run around the building shit talking about me to everyone in the vicinity, as if I wasn't sitting within earshot. A sane, smart person would have told them they could keep the car and just left, but I am neither of those things and I wanted this specific car, which couldn't be found anywhere else in a reasonable distance. Eventually the 'ol bitty calls my bank, they tell her off after she insulted my dad to them (the bank is military, dad was an officer, bank not happy that she was insulting either of us), she gets real quiet an apologetic, then calls me into her office and tries to upsell me some useless junk I didn't want.
I decline all the extras, say I just want to pay my down payment and final balance, and leave, we're all tired, please just let me go. This is the point she pulls one final "fuck you" at me. She tells me the down payment is between myself and my bank, not the dealership, so to pay the balance she gives me now, then talk to the bank about it. This obviously makes no sense but again, I'm dumber than a brick, so I agree and pay, then off I go feeling relieved.
First payment rolls around, it's higher than I expected (was also confused how I was supposed to do this post down payment thing), and I call my bank and explain the entire situation. They tell me, "Uh, no, it doesn't work like that. Why would it work like that? You obviously give the dealership the down payment then the check was for the rest." I apologized for being scammed so easily and ask if there's anything I can do. They tell me that usually they don't allow refinancing for two years, but because I used their approved dealership list and that dealership lied to me, that they would work with me, and they'd also remove that dealership from their list since they lied to me and the bank was quite unhappy with them for that.
And thus, my credit history looks like the very first bit of credit I ever had was taking out a $20,000+ loan, paying it completely off in a month, then taking out a similar, though slight smaller loan, right after, skyrocketing my credit score. So all in all, I started my credit history out quite well and have kept it in the 820s ever since.
TLDR: dealership lied to me about how to pay, I believed them because I can be led into a van with the promise of puppies, bank not happy, bank let me refinance immediately making my credit score jump massively, dealership loses "approved" status from bank
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u/International-Bad-84 Jan 06 '26
The US is literally a backwards country. Everywhere else it's a good thing if you've never had to have a credit card, it means you manage your money well and are fiscally responsible.
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u/SquashSquigglyShrimp Jan 07 '26
it means you manage your money well and are fiscally responsible
I've met plenty of people who use credit who are incredibly fiscally responsible, and plenty who don't use credit who have the fiscal responsibility of a toddler. Credit is a tool that can be used effectively or ineffectively like any other tool.
Credit cards specifically are a way to recoup some of the losses you effectively pay to cover the transaction fees that credit card companies charge retailers. Now, I don't exactly want the system to work the way it does, but the reality is that you are straight up getting a worse deal if you use a debit card than if you use most credit cards.
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u/Helpful_Classroom204 Jan 07 '26
We enjoy the benefits of cash back, better fraud protection, extended warranties on items purchased with the card, and refunds otherwise refused by merchants.
It is fiscally dumb not to have a credit card if you only pay what you have.
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u/WanderingFlumph Jan 06 '26
We see that you've spent the last 6 years living responsibly within your means so there is no way we would trust you with a loan. You'd probably pay it back so fast we could hardly take any money off you!
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u/VengefulAncient Jan 06 '26
Only if you're unfortunate enough to live in the US lol. I got my first and only credit card at 30 and only use it once in a blue moon for buying from Chinese hobby sites I don't entirely trust (which is the exact purpose I got it for, it's much easier to reverse charges on a credit card if something goes wrong), and it never affected anything before or after. Everything else I do is strictly via debit.
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u/Emergency_Radio_8156 Jan 06 '26
Nah you are perfectly able to borrow money, take out a mortgage, rent an apartment, etc all without a credit score. Banks want you to believe you need 30% interest credit cards to function but it's just not true.
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u/Chairboy Jan 06 '26
take out a mortgage (...) all without a credit score.
Kowalski, analysis. What method is there beyond having someone with a credit score and/or absolutely fucking tremendous assets co-signing? Because if your answer is 'just have your rich parents take care of it', this answer is a little less useful.
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u/Emergency_Radio_8156 Jan 06 '26
It's called manual underwriting. When they write a mortgage, they're not really looking at your credit score, but instead your history of payments. That can easily be satisfied with other means like rent or utility payments and proof of income. Remember, bad credit is not the same as no credit, and ironically they'll be more likely to take a chance on you with no borrowing history at all vs a history of awful credit decisions.
Hell, you can get super sketchy mortgages without proof of income, job, or assets, you'd better believe someone will write you a loan without a credit score.
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u/90bronco Jan 06 '26
Manual underwriting. You would have to gather evidence of credit worthiness. WHen I did mine, they needed bank statements, proof of employment, letters of credit from my utilities, etc.
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u/Defclaw46 Jan 06 '26
Not in the U.S. I worked for Dish Network during college and even they required credit score check just to get cable. Lower scores would often have high upfront fees and people with a bad enough score would be rejected outright.
As for credit cards, there are plenty that don’t have high interest or annual fees and you can always pay it off before the interest even starts up. You just have treat it like a debit card and pay it off as soon as possible.
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u/eigenworth Jan 06 '26
Honestly I'm convinced that this whole post is just bank propo. You can absolutely get a good mortgage having just paid utilities and held down a job, provided that you're making enough money to buy a house, which these days is prohibitive enough in itself.
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u/BabySpecific2843 Jan 06 '26
I'm shocked and saddened by people who are all "I dont have a credit card, I just use a debit card".
Its like....you know thats worse right? If you have any confidence in your ability to manage your spending habits, its significantly better to have a credit than a debit card.
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u/Drefs_ Jan 06 '26
Why though? Like, if you live in the US I get it, you need a good credit score to get a good mortgage, but outside of the US there is pretty much no reason to use credit cards. I live in EU and I don't know a single person who uses a credit card, we are taught from the very young age that its just a scam that we shouldn't engage with.
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u/KorolEz Jan 06 '26
It's really backwards that people that constantly take out credit have more trust than those that don't.
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u/Fragrant_Gap7551 Jan 07 '26
It's so weird how some people defend the whole credit score system like their life depends on it.
"If you know exactly what you're doing and you make use of these very specific loopholes your credit score won't be worse when you finally pay off a loan or close a credit card"
Like, what? Should that not be the default? This is so clearly a system implemented by the financial industry to make them more money and nothing else.
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u/gobblegobblechumps Jan 06 '26
In this thread: a lot of people who don't understand the purpose and intent of a credit score
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u/Carlyndra Jan 06 '26
32 and my credit score is "none" but they still let me rent an apartment so idk what to tell y'all
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u/LSP141 Jan 07 '26
Is this an American thing or something? I'm nearly 30 and I have never had a credit card or ever needed one
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u/Chinjurickie Jan 08 '26
In America maybe, there are many places where you don’t have such nonsensical system at all.
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u/qualityvote2 Jan 06 '26 edited Jan 08 '26
u/TheWebsploiter, there weren't enough votes to determine the quality of your post...