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That's bullshit I keep a zero balance on my cards and have a perfect credit score. Car is paid off,I don't own a house and only have a couple hundred dollars of student debt.

It amazes me that the western propaganda keeps talking about a Chinese social credit system that is an extension of existing social rankings and ratings in China which have existed for millennia, but no one blinks an eye to this American credit system that is horrendous. The Chinese system is mainly in place for business, not so much the individual, like in the US.

The US credit system is a way to make the poor, poorer with insane interest rates that are illegal in other parts of the world. The matrix for the credit system is unclear as it is managed by private companies. The whole thing is insane, but no let's point at evil China where the system has no impact on normal people, unlike in the US.

Meanwhile people mock a fabricated Chinese social credit system that doesn't exist (I know -- I've lived there)

This myth is the dumber cousin of ‘tax write offs generate income’.

when you close your credit card your credit score goes down.

i called one of the three credit companies and asked, "Why?" They said because it makes me very hard to extend credit to without a credit card so that makes my score go down.

...

i'm also not a very good sea captain because i'm not a sea captain but it doesn't cost me imaginary money points on my insurance premiums.

In my country you have to show 6 months of bank account history for all your accounts. You can have zero credit history and get a mortgage, they only really care what your income and regular expenses are. No credit score as such. If you've never applied for a loan, nobody but your own bank and possibly the government would know what your finances are up to.

Still not had a credit card and pretty sure I will be able to live my entire life without knowing or caring what my credit rating is.

thought it was total credit limit / useage % something like that. get a few high limit cards and don't use them much. number goes up. mine bounces about 10 points every month. quit paying attention. always pay balance. hovering at 820 for years. net worth figures in too. not an expert. playing their game 30 years.

It's not poorly implemented. It works exactly as designed. What most people fail to understand is it's not a rating of how likely you are to repay a loan, it's a rating of how profitable it is to loan to you.

So if you pay off your cards completely, you aren't paying interest, and you're not as profitable a customer as someone who has 10k in debt that they're paying interest on every month.

A lot of people in here arguing about how this works. Short answer is it doesn't work that way. Period.

Your score does not drop when you pay off a card. It's drops when you pay off a loan.

Like others said, I'm calling bull on this. I'm young and haven't had my card for a long time, but I pay it off in full each month and I'm in the high 700s. The only things I can remember reducing my score are: 1. My credit history is too young, 2. I only have 1 line of credit rn, and 3. I had high revolving utilization one month. So now I try to keep my utilization around 30-35%.

If you don't pay off in full you are now paying interest on your card. I did take econ class in high school (basically US financial education, and if it's not federally required then it's a mandatory class in my state.) and while it left much to be desired, this was one of the few things we learned. Basically the biggest lesson from that class was interest sucks and you should avoid it at all costs in anything, wether it be a credit card, payment plan, loan, etc. Always try to pay outright if you can, and reduce your credit usage to what you can actually afford. We would literally do the math to show how much more money you spend over time.

Your score does not drop when you fully pay off a credit card. If you pay your balance in full before the due date, not only are you not charged interest for that month, but your credit score is likely to go up due to making a payment on time. I used to carry a balance but have been paying it off monthly for many years now and my score is higher.

If you close an account, the total amount of credit you have decreases and your score may drop, however this is often transient. It's not useful to worry about your score week to week unless there's an obvious problem, follow it over the long term instead.

I realised it's all fake anyways when my back went out and I was unable to walk for 3 years while I was on the wait list for surgery (I'm ok now).

I went from high credit with a decent paying but physical job to unemployed and no longer able up work in my industry. My partner had a few months of unemployment at the same time and I wasn't able to pay my $11k credit card debt and he couldn't pay his $20k debt. We borrowed money from my younger brother to pay rent for a few months.

Spoke to a free financial councillor, she talked to the banks for us and they happily just waived both debts. She told us to ignore both of our zip and afterpay debts, and not to reply to their debt collectors. And just like that we were debt free after owing 40k between us.

Came out the other side better off financially even though our credit score has tanked. And even though I don't earn an income now or have any debt/credit, my credit score keeps rising?

Shits made up and the numbers don't matter.