…except that it used to be that your ability to secure a loan was based on where you went to school, how firm your handshake was, and if you happened to have the right skin color and sex organs.
The current system certainly isn’t perfect; and if you’re denied a loan you have a legal right (in the US) to know the reason.
There are systemic issues, to be sure. But the nominal goal is absolutely better than what we used to have.
We can’t ignore that there are other ways of doing it besides credit scores or overt racism. Some countries have no credit scores at all and just base loan eligibility on your salary and employment history.
And how exactly is guessing your credit worthiness based on those factors a better system than literally keeping track of what happened each previous time money was lent to you, when it comes to making a decision on lending money to you?
This is like arguing it’s a better idea to select NBA players by their height, than by their performance in high school and college basketball games.
Sorry, I’m not sure how to answer “how is measuring your credit worthiness based on your income a good way to determine how much to lend you.” I would think it’s pretty obvious that your capacity to repay a loan is dependent on your current income, not how many loans and credit cards you’ve had active in the past.
1 in 4 households earning over $100,000 a year live paycheck to paycheck–not because they can’t make ends meet, but because their money management sucks. A high income has very little relationship with responsible borrowing, despite what many would assume.
I’d definitely recommend getting a credit report (not from the websites that advertise with an insane jingle, but from the actual credit bureaus — you’re entitled to a free report). Mine had debt from a relative with a similar name; I was able to get that removed. They will also tell you in more detail what goes in to calculating it.
I agree that it’s not perfect, and often very opaque, but you should be able to get some understanding of why she doesn’t have good credit.
Just because you refuse to learn doesn’t mean it’s magic. It is very simple to understand why exactly you have the credit score you do. Maybe mommy isn’t being entirely truthful with you.
Does your mom have debt that she pays on time? Is her “doing everything right” visible to credit scoring agencies and aligned what statistic says about good borrowing customers?
Credit score doesn’t mean “runs a good personal economy” it means “likely to pay their loans on time, consistently, based on statistics that are observable”.
Most people who think they understand how credit scores work…don’t understand how credit scores work.
The biggest things are loan-to-limit, payment history, and average age of accounts.
Loan-to-limit is easily achieved by keeping balances below 50%, and ideally below 30%. It’s also helped tremendously by not carrying a revolving balance (paying the statement balance in full each month) and not closing idle cards.
Payment history is of course helped by making payments on time.
And AAoA is probably the easiest. Just don’t close cards. Call and “downgrade” a card if it isn’t worth the annual fee. If there’s no annual fee, there’s no reason to close a card.
Just make sure you use it every now and then and pay it off. I sock-drawered one of my oldest cards a long time ago and it just closed last month from being idle, and that took a hit to my score (high limit gone and it’s no longer incrementing time in my AAoA).
It’s also worth mentioning that credit scores don’t matter until you are looking for credit. Credit cards are probably the easiest way to build credit, as long as they are used properly. But they’ll give a basic card to any schmuck. Where it really matters is getting mortgages and larger loans like cars. That’s where having a good score matters. And also better cards that earn more points/miles/cashback and have other fringe benefits.
Only people who are bad credit risks ever come up with this take, lmao.
The sole function of credit scores is to benefit people who are reliably ‘good for it’ when they borrow money. Without them, everyone is treated as just as high a risk as the worst borrowers who are least likely to pay back their debts, and you gain no benefit from reliably paying back your debts. But with them, your good borrowing is kept track of, and good reputation means lenders trust you more to pay your debts back, so they’re willing to lend more, and they are willing to charge less interest.
Removing credit scores changes nothing for bad borrowers, and hurts good borrowers.
The thing is you’re forgetting who are good borrowers and who are bad borrowers. A person with a low income with a precarious job will be a very bad borrower, and imposing a higher interest rate on them on top of that is just the final nail in the coffin. We generally believe universal healthcare is good, and we don’t want to discriminate “good health” and “bad health” people and make unhealthy people pay more, do we?
imposing a higher interest rate on them on top of that is just the final nail in the coffin.
That’s the only way to justify loaning to people like that at all, given how much more often they default (and the lender never gets repaid at all). If lenders were forced to give the same interest rate to everyone, that would cause them not to lend to “A person with a low income with a precarious job” at all.
If the lenders operate with the purpose of maximizing profit, then yeah, it makes sense not to loan money to people in precarious situations except at high interest rates, that’s my whole point: that’s evil, the profit motive leads to evil decisions. Let’s have public banks instead, where interest rates for loans are equalised, in the same way that every taxpayer gets identical access to healthcare regardless of how much they contribute through their income.
You’re discounting the people who have always lived within their means and so never took on debt. They also don’t have good credit. They’ve never missed a payment. They’re good for the money. But they don’t have a history showing that because they’ve never needed that.
You’re discounting the people who have always lived within their means and so never took on debt.
No I’m not. Those people are unknown quantities, and so also suffer if credit scores go away, because bad borrowers are worse than first-time borrowers, so without credit scores, first-timers will be treated worse.
Technically, at least where I live in Canada, you have to pay taxes on crypto income and capital gains. It’s possible for goverments to track crypto transactions.
That being said, if you think normal fiat currencies are without crimes and illegal activities, you’re kinda stupid.
I’m not talking about the current way, I’m talking about the possibility of a privacy-focused crypto, issued by the state, where transactions can be made private with the Blockchain. This crypto, as it would be used for normal transactions, wouldn’t have more variability or speculation than the variability and speculation in converting US Dollars to UK Pounds. The post talks in hypotheticals, I do too.
I don’t think fiat currency isn’t used for illegal activity, I think crypto is mostly not used for normal transactions.
It’s not even about reputation, it’s mostly about taxes. You enforce the private sector using the state’s monopoly of violence to pay tributes in a currency that you create. This way, when there are transactions in the private sector, the main currency that people will want to use (provided it’s stable enough) is the one that lets them pay their taxes later. You can’t pay taxes with dollars in Hungary, which makes Hungarian people use Hungarian currency instead of Chinese Yuan even if the Chinese Yuan is a much stronger currency.
And yes, the state having the monopoly of violence and enforcing taxes is a good thing, before anyone accuses me of being an anarchocapitalist.
Credit rating also depends on credit to debt ratio. You want to keep it below 35%, so you would need a credit line of $100T or more to have a great rating.
Articles and posts like this really just exist for conservatives to shout that we need to stop federal spending and cut out “unimportant” things like Dept of Education, as described in Project 2025.
The problem is that debt is good. It enables us to pay for infrastructure projects and services. It doesn’t work like a household budget…not on the scale of international economies…because money “in the bank” is money that’s not in circulation.
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
You all complain about Musk hoarding a few hundred billions. Imagine if the debt were in the opposite direction and the government had $34T sitting in the bank doing nothing.
And anyone can buy Treasury debt. In fact, last year it was an AMAZING return on investment for anyone that bought into it and holds into the debt for a few years. One of the safest places anybody could put money to earn a return (behind a HYSA at FDIC insured banks).
Fully agreed, the whole “Debt bad! Deficit evil!” trope is just neoliberal propaganda against public expenditure, which translates into a weakening of the welfare state
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
This is why I think the velocity of money should be a key economic indicator. Money moving around and doing work is what makes an economy better for everyone. When it starts to pool in the economy it slows down and benefits only a few.
This is another thing I learned from “Making Money”
I’m not a financial expert, so someone who is please step in and correct anything that I say is wrong. I need to learn too.
It’s because the government’s debt is also a surplus. Government debt isn’t like personal debt because the government debt is mostly through selling bonds that the government issues. Most of that debt is owned by American citizens, in one way or another, who buy those bonds. Most of that $34 trillion is money the government owes it’s people, or at least the Americans who hold those bonds.
It’s not really money you owe but it’s money that is owed to you. Well actually the billionaire class who can actually afford to buy these bonds but hey, that’s Capitalism baby.
Lota of differences but the key is: A ponzi scheme pays returns out of future investment. Fractional reserve lending pays returns from interest collected on investments.
Are you immortal? Do you have an income vastly higher than the servicing cost of that debt? Do you owe the large a majority of that debt to yourself? Are you able to, if push came to shove, tell your external creditors to go fuck themselves and dare them to so much as try to collect on the debt you don’t feel like paying? If you can’t answer “yes” to all these questions, you aren’t the US and have a debt situation that has absolutely nothing in common with the US debt.
I remember users on another platform went into full rage mode when I said the stock market was just legalized gambling, telling me how SAFE!!! IT IS IF YOU DO YOUR RESEARCH!!!>
Okay. Black Friday and Too Big to Fail only happened in my dreams.
US debt is currently higher than their GDP. Even if they could leverage the entire country into only paying debt (they can’t), it would take over a year to pay off. At the current average interest rate of ~3%, that’s enough to pay for the entirety of NASA’s budget five times over.
The last time US debt was greater than their GDP was the second world war.
…or, since the federal reserve creates money, they could do quite literally 100 strokes on a keyboard at the FED and repay the debt. A state doesn’t fund itself through taxes, taxes serve many purposes but funding a state isn’t one of them.
Ignoring, for a moment, the inherent and fundamental differences between an individual and a state…
…in my late 20s and early 30s I bought a new car.
At the time, that car cost more than I had in my accounts plus my other possessions at the time. In fairness, my annual income was more than the total cost of the car, buuuut I also was carrying tens of thousands of dollars of student loan debt as well, meaning my overall total debt was significantly higher than my annual income, or my “personal GDP” if you will.
Yet when I applied for my car loan, it came through with easy approval and I even qualified for the best possible interest rate.
Why? Because I’ve always paid on my debts adequately and promptly.
Nobody bats an eye when a couple buys a house that costs more than what they can cover with their combined income in one year. Why? Because that’s an arbitrary and unrealistic yard stick of comparison and nobody expects them to pay off a house in a year. They’re able to buy their house and live in it immediately, and pay for it incrementally, over time, as they earn over the coming years because of debt. And the bank is willing to lend the money because they’ll make money in the long run through interest.
Similarly, it’s unreasonable to imply that the US shouldn’t carry more debt than it’s GDP because the two metrics aren’t directly linked in any way. And since the US has excellent credit worthiness, that debt is far safer than the bank’s loan to the homebuyers. And the US gains access to borrowed funds by setting it’s own interest rates through the Fed, which tells lenders exactly how much they’ll make in interest if they let the US government borrow some of their money.
And since the US is a safer bet than homebuyers, that’s why home interest rates are higher than the rate at the Fed: if they were equal, banks would never lend to homebuyers since they could get the same return by lending to the government. So instead, they set their own, higher rates for homebuyers, to account for the higher risk of lending to a party who has a much higher likelihood of default.
They said service the debt, not pay off the whole thing. For an analogy, your whole mortgage being less than your annual salary isn’t a requirement; your monthly mortgage payment being a fraction of your monthly salary is.
Andrew Jackson sold off enough Native American land to cause a real estate bubble, and between that and other things started a bank run, and the kind of people that think they’ll win the shell game pretend it’s because non-productive debt is good, and the problem was elimination of debt, not how it was done and other circumstances (among them being on a gold standard so you can actually do a bank run)
Authoritarianism is an empty label since it’s used against one’s opposing ideologies. Rarely if ever is the inherent authoritarianism of the current or any system of government acknowledged.
Understandable. But how does a government choose the label, in this case, communism, when the it’s governed by a very small group of individuals and in most cases against the will of the people?
The governing body is the vanguard which is to downsize overtime and the country is to eventually shift to a worker lead government. It would be anarchy to deploy communism without first building the systems to allow for a workers lead government, especially off of the back from a greed riddled society and like wise surrounded by greed riddled capitalist countries.
I should also so that mention communism isnt often implemented against the will of the people, Russia pre communism was an awful place, low literary, low life expectancy and the working class/ peasantry were exploited by the west and ruling class. They had a long bloody civil war and held strong. Then after which things slowly improved under communism.
I’m definitely not an expert on this. But let’s take foss as an example. I find it to be an amazing bottom up community that contributes to itself freely. I can’t imagine how a top down system would flourish if a small group of people decided what was good for the foss community and deleted what they thought wasn’t. Is there is a distinction? Is there different versions of communism I should check out?
There’s hypothetically a bunch of different version of communism for everyone. The thing is, Marx described the problems with capitalism, and some vague sense of what socialism could be, some guidelines of what it should aim for, then kind of left the details up to each individual society to get there how they think is best based on their individual material conditions. He gave his own guesses, but didn’t think he could predict that part fully, it would be up to the people of the future to figure it out and build on. A third world country, rural serf based near fuedal society, like Russia, would have completely different needs from some post-industrial country, like if Germany turned communist, for example. If the world’s sole superpower, the US, turned communist, it would probably be a lot different than communist countries that had to transition under siege neighboring imperialism, like Cuba, North Korea, or Vietnam.
This is just to answer your last question. Don’t think this really addresses your other questions, but just wanted to explain that part, as I’ve had it explained to me before. But I generally agree with you. There should still be some form of democracy but it might look different than what we are used to here in the US or liberal west.
foss has a legally binding licence to support itself, this licence can be seen as a vanguard as it steers and protects the software, without the licence people would be sure to steal and monetise others works. But let’s say Foss became the defacto, everyone releases free fully open and no anti feature software, we could loss the vanguard and naturally a classless system would be present.
No, that is just another class of ownership. Whoever maintains the AI would be the ruling class. Or if we’re talking AGI, there’s little reason humanity should trust what humans build over what humans do.
Oh, in that case it’s a Democratic Republic of the Free People. The label the government chooses for itself might not be accurate according to political science.
Communism can be flawed and a flaw it is, but let’s not forget that capitalism imposing indignity is capitalism working perfectly and is not a flaw. We reward greed.
So with this communism if used correctly can lead to prosperity.
I would like to point you towards reading about the transitional period, its an important part of communism and also reading about internationalism, essentially its very hard to move from a greedy society to communism and equally its hard to be a communist country while surrounded by greedy countries.
Airlines can treat people like shit because it’s not a free market. If anyone who wanted could start up their own airline, they’d be a lot more consumer-friendly by necessity.
According to Marx communism is a scenario of complete freedom.
It’s the socialist state that is authoritarian.
I think Marx’s idea is to actively burn away the old and then the new grow spontaneously. I think he’s wrong, since the old is a result of spontaneous growth already, but that’s the theory at least.
“Communism” is always going to be authoritarian if by “communism” you mean a government that attempts to control the whole of society. If by “communism” you mean a society where private property (not personal property) is democratically managed, that has nothing to do with authoritarism. Nor with the Soviet Union, or China, for that matter.
The vast majority of criticism towards .ml and others come from them being tankies, not communists. I’m a communist, by which I mean I want society to overcome social classes and hierarchies, and therefore, defending authoritarian states with hierarchies where the people on top enjoy political and economic privilege is contrary to communism.
So you’re a communist that denounces every communist project atop an ivory tower, instead of understanding the realities of actually building a socialist society (no magical button that will make us overcome hierarchies overnight, I’m afraid). Sounds like you’re just larping about being a communist
i agree but voting 3rd party is the same as nit voting because you only have 2 realistic options which makes it more likely for trump to become president than if you voted for biden (also fuck tankies)
Continuing as usual is defeat. The more votes for 3rd party the more broken the system will look, with this a campaign for real change could take place. Instead you want to bury your head in the sand.
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