this post was submitted on 15 Feb 2024
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[–] radix@lemm.ee 6 points 9 months ago (2 children)

That would imply people who constantly carry credit card debt would have high credit ratings, which is false as far as I understand.

[–] KumaLumaJuma 4 points 9 months ago (1 children)

It’s not, really, although it’s a bit more nuanced than that.

Credit scores are now taking in more information than ever, so things like your debt repayments as a % of your income (affordability) are feeding in as well.

For the people carrying credit card debt, one CRA might give you a better score if you carry a balance >0 but <25% of your total credit limit, and another it could be 0 to 40% so you will see some score variability.

If your utilisation is higher your score may suffer. This is only one aspect, though. Repayments on other debt (mortgages, utilities, mobile phones) play a part, as do things like voter registration and the time you have kept open your accounts. TransUnion is now incorporating BNPL (like Klarna) data for some reporting, although not sure it feeds into the score view yet).

I would highly recommend using whatever free apps are available for each of the CRAs (TransUnion, Experian and Equifax are the three main providers) to monitor your score.

For TransUnion you should be able to use the Credit Karma app in both the US and UK, and in the UK you also have the ClearScore app for Equifax score.

Experian in the UK is on the process of removing 3rd party app access (would have been MoneySaving Expert app before, but that’s moving to TransUnion).

[–] radix@lemm.ee 2 points 9 months ago (2 children)

Voter registration?? So you get a higher score if you're a certain political party. Alrighty then.

I wish they were transparent about what exactly they use and how they use it, not what they're saying they "may" use.

[–] davidturner@programming.dev 4 points 9 months ago

Not sure which part of the world the above poster was referencing, but I wanted to highlight that in some countries (like the UK that is briefly mentioned) registering to vote doesn’t come with a political alignment, it’s merely registering to vote.

From what I recall that is definitely a factor in credit ratings here in the UK, and may well be in other countries as well.

[–] KumaLumaJuma 2 points 9 months ago

No it’s nothing to do with political affiliation at all,

And someone has already replied about the UK which is largely where my experience lies in this area.

Voter registration (entry onto the electoral roll) is additional confirmation that the address you are using for other credit/loan information is accurate.

[–] bi_tux@lemmy.world 2 points 9 months ago

no it wouldn't, due to the higher risk of them not peying it back