Abolish credit scores and revamp the credit system entirely.
There should be no “credit score” associated with a person’s social security number. Instead, banks and renters should be able to list negative debt repayments with one agency. That agency should then report negative repayments on a background check but there should be no “credit score” associated with negative repayment history.
All loans and credit cards should be solely based off a person’s income, job history, and repayment history (having no negative repayment history listed on a background check would prove high likelihood of repayment).
The current credit system makes it nearly impossible to quickly repair credit after negative repayment history. On the flip side, damaging credit is extremely easy and can be done in one denied loan application.
This current system enables lenders to hike interest rates, which makes it even harder for people to be approved for basic necessities: a house and vehicle.
It can take 5+ years for a person to rebuild their credit score after just a few months of poor repayment history, and the reasons for poor repayment are never taken into consideration.
This is definitely a problem. I’m about to pay off my mortgage and as a result my credit score is going to take a hit. Being debt free hurts your credit and it shouldn’t as you’ve proven to be responsible with your debt management. The debt scoring system only works when you play the debt game.
My boyfriend sold his house and his ex’s co-owned car was paid off in his divorce and it TANKED his credit below 600. It’s so unbelievably unfair and makes it so hard for Americans to get ahead.
I never wanted a credit score but there’s no opting out if you want to use a bank, which is a necessary evil in and of itself.
I paid off a vehicle during the same period that I was house hunting and afterwards was notifed that I was no longer qualified for a home loan since my score dropped. I ought to be shown in good standing for fulfilling my loan obligations but no instead I’m punished for my hard work and sacrifice. What a absolutely nasty and dehumanizing thing credit scores are. There has to be a better way!
And basing employment decisions on credit scores is absolutely reprehensible and unethical. It is usually the employers that cause people to default on payments - layoffs, paycuts, demotions etc. This is absolutely asinine every way you look at it. Especially considering above mentioned scenarios with dropping scores upon loan completion.
It’s a system designed to keep the poor, poor and the rich, rich.
The credit score is a measure of how much money you have made the bank, NOT your ability to pay. The reason your score went down when you paid that car off is because you cost that bank money in the interest it wasn’t going to get. How this is even remotely Constitutional is beyond me.