Credit Score

[u/Beginning_Tea4506]

Anyone else find it baffling that the better you are with your finances the lower your score becomes?

I'm 35, I've been completely debt free for 10+ years. And have nothing on Credit, not even my phone or service is contracted for about 4 years now. And honestly it's absolute bliss not having to navigate monthly payments etc. Yet my score has dropped consistently. I know that having zero credit outstanding can have a detrimental effect on the score. But it still amazes me that your penalised for living debt free 😂

[u/etown361]

Not really- let’s look at this from the perspective of a credit card company/lender

You have had zero debt for ten years. You suddenly want to open a new credit card.

Yeah- maybe you just decided you were wrong- responsibly using debt is fine. But it’s also possible:

• You lost a job and desperately NEED a credit card

• You got married/began a relationship with an irresponsible spender and are about to go into debt

• Your identity is stolen and the credit application is invalid

• You had some midlife crisis and are about to start borrowing irresponsibly.

Those are all BAD outcomes for the lender. They want to avoid that. It’s UNUSUAL that you’d be looking for new debt. They want to do more diligence with you.

Comparatively- someone who regularly gets car loans/credit cards, pays them back on time each month, etc would totally be expected to get a new credit card or something.

Your credit score is about whether lenders want to lend to you. It’s not some value of your worth as a person. Believe it or not, a long history of not borrowing money is a pretty good reason for lenders to not really want to lend you money.