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Early_To_Risa@sh.itjust.works

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Anon tries to understand credit scores (sh.itjust.works)

submitted 16 hours ago by Early_To_Risa@sh.itjust.works to c/greentext@sh.itjust.works

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[–] damnedfurry@lemmy.world 3 points 7 hours ago (1 children)

taking out loans and paying them back is the most well known way of raising a credit score.

This is so much the case that many financial institutions have "credit builder loans" which are essentially a loophole for building credit, where you're given a 'fake loan' that you repay, then you're given back your payments at the end of it. Meanwhile, the credit reporting agencies see that you took out a loan and faithfully repaid it, so your credit score goes up.

One arguably unjust part about credit scores is that the actions of people related to you, or simply sharing the same surname as you, can affect it! E.G i have heard that a friend-of-a-friend’s dad took out too many loans and now their credit score suffers.

It doesn't work that way, at all. Credit scores are individual. Either that person is mistaken, or they were a co-signer on one or more of those loans (which makes them matter to their score also).

Anyway if it’s true that the actions of other people can affect your credit score

It's not, they can't.

[–] FinjaminPoach@lemmy.world 2 points 6 hours ago

It doesn’t work that way, at all. Credit scores are individual. Either that person is mistaken, or they were a co-signer on one or more of those loans (which makes them matter to their score also).

Thanks for fact-checking me man, I did start to think I'd got the wrong end of the stick while writing it.