I just think it is sort of a sucker score. My understanding is that if you always pay your debts you will have a decent credit score. But the dream customer not only pays, he/she also is prone to getting into debt. Being debt averse (arguably being responsible) will limit your score.
As far as not being able to get credit, so far this has not been a problem. I know the rating agencies say you must have a score. Just like the credit card companies say you need a card. They will say "How will you rent a car?".
If I wanted a score I could get it back quickly. Last time I had one the banks were ridiculous in their offers to me. The amounts they said I could borrow were way too much money. Someone has to be the grown-up and the banks are not up for that task.
That's correct, and many parents "start their kids off on the right foot" by adding kids to their own debt accounts. For "the best" score, you want to utilize credit regularly, but not "over-utilize." If you have 3 cards you can put $10k each on, and care about your credit score, it's best to "diversify" your debt instead of maxing one out because it has a marginally better interest rate. I learned that from maxing out 0% APR credit cards, only to find the offers dried up even when I had almost nothing on the xx% cards and my credit score dropped from around 800 to the mid 600s. This eventually corrected after paying off the credit card when the promotional rate expired.As far as not being able to get credit, so far this has not been a problem. I know the rating agencies say you must have a score. Just like the credit card companies say you need a card. They will say "How will you rent a car?".
If I wanted a score I could get it back quickly. Last time I had one the banks were ridiculous in their offers to me. The amounts they said I could borrow were way too much money. Someone has to be the grown-up and the banks are not up for that task.
They also don't credit your score when you pay bills on time (rather, I assume these companies don't report it to the credit agencies), but if you slip up and miss a payment, you'll sure get a huge penalty.
There are flaws, for sure, but it's a mutually-beneficial system, I think. They offer you boatloads of cash because they trust you. There's pretty much just a "no trust" and "trust" threshold. If lenders don't trust you, you're unlikely to get anything substantial. If lenders trust you, you'll get more than you might be able to pay off, because they assume you're responsible and intelligent enough to self-limit yourself as necessary. Basically, they treat you like a reasonable human being with a basic set of ethics. It's very difficult to distinguish between someone who's penniless as a result of tough luck and someone who either has no intent to pay back, or is "overly-optimistic" - so, the idea is that loans should go to people who have a lot of money, already, and steady income, but need more money to expand. Of course, banks hide the "I don't trust you" statement with numbers to pretend it's a purely objective decision (and some loan officers really do base their decision entirely on what the computer spits out) so they don't have to deal with suggesting to an individual that they appear to be unethical, have too high of expectations for themselves, or are just asking for more than they're worth.