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   scriptjunkie (sj@social.scriptjunkie.us)'s status on Thursday, 29-May-2025 01:55:16 JST scriptjunkie

   A credit score isn't mainly about "ability" or "acceptable risk"-it's whether lenders will make money lending to you. If you don't hold debt and you have plenty of income/assets, you'll probably just pay a loan back immediately. And they won't make money.
   https://x.com/wanyeburkett/status/1927410265584234813

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     Lee Holmes :donor: (lee_holmes@infosec.exchange)'s status on Thursday, 29-May-2025 06:56:16 JST Lee Holmes :donor:

     in reply to

     @sj Credit scores don't account for income / assets though.

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     scriptjunkie (sj@social.scriptjunkie.us)'s status on Thursday, 29-May-2025 06:56:16 JST scriptjunkie

     in reply to

     • Lee Holmes :donor:

     @Lee_Holmes I should have left that off, but the principle is the same. People think a credit score is only about risk of default then naturally get angry when very financially careful people with no debt have bad scores. Not having debt is a sign you won't hold it and they won't make money lending to you.

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     scriptjunkie (sj@social.scriptjunkie.us)'s status on Thursday, 29-May-2025 10:38:54 JST scriptjunkie

     in reply to

     • Lee Holmes :donor:

     @Lee_Holmes I mean, they're not going to outright say things like "We want you paying us interest in lots of ways" instead they say "The ability to successfully manage multiple debts and different credit types tends to benefit your credit scores". It's pretty much the same reason why bundling home & auto insurance "benefits" you, you're paying them more money for more things. Risk of default or late payment is a huge part of whether they make a profit, so it's definitely most of the score, but "likelihood you'll be making the lender money" is a far more straightforward explanation for the whole enchilada. It is mostly aligned with, but subtly different than your risk of not paying.

   • Embed this notice
     Lee Holmes :donor: (lee_holmes@infosec.exchange)'s status on Thursday, 29-May-2025 10:38:55 JST Lee Holmes :donor:

     in reply to

     @sj Alternatively, having no debt could be a sign that you haven't proven you can manage a debt load and are therefore more risky.

     As far as I understand, you get dinged from not having enough and also dinged for having too much.

     Whether you believe what the lion says or not, this is what the lion says :) It does appear more biased toward risk than whether you carry balances: https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-affects-your-credit-scores/

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     scriptjunkie (sj@social.scriptjunkie.us)'s status on Friday, 30-May-2025 01:21:19 JST scriptjunkie

     in reply to

     • Lee Holmes :donor:

     @Lee_Holmes "the age of your oldest credit account, the age of your newest credit account and the average age of all your accounts" is average length of debt holding. I just checked against my own credit report and elsewhere online confirms utility bills "are not credit accounts" and do not factor into length of credit history.

     "utility bills typically have no impact on your credit score because the information is not generally reported to credit bureaus as they are not credit accounts. However, if you become delinquent in paying your utility bills, the utilities companies could report the late payments to the credit bureaus" https://www.investopedia.com/ask/answers/12/paying-utility-bills-improve-credit.asp

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     Lee Holmes :donor: (lee_holmes@infosec.exchange)'s status on Friday, 30-May-2025 01:21:20 JST Lee Holmes :donor:

     in reply to

     @sj If you were to design a system to favor those who will generate profit, would you pick those metrics? I think I would add things like:

     - Average length of debt holding ("Our research shows that people who hold debt for a long time and pay it off slowly can be depended on to do so for new loans and are therefore less risky"). Note that this would have to be different than the current metric of "Length of Credit History", since the current metric includes non-debt accounts like utility bills.
     - Use of high-interest debt ("Consumers that demonstrate the skill to leverage high-interest debt when needed are more likely to be trustworthy with new debt")

     I know somebody that had perfect credit (850) where their only debt-based accounts were a mortgage and a credit card that they paid off monthly, so 🤔