Questionable Content XVI: Yes, Butt

[The Glyphstone]

Which also leads to the weird side effect that paying off a old debt can drop your credit rating, if its the oldest one you have and thus your visible credit history becomes shorter.

[Delicious Taffy]

This credit discussion is just making me feel a little better about having no ability to wrap my head around how credit works. It apparently works on moon logic dreamt up by upside-down ghost elves.

[Wraith]

[Credit scores] apparently work on moon logic dreamt up by upside-down ghost elves.

Congratulations, you now fully understand finance as well as the average stock broker.

Also: Page 50 means New Thread Time. Have fun!

[Cikomyr2]

This credit discussion is just making me feel a little better about having no ability to wrap my head around how credit works. It apparently works on moon logic dreamt up by upside-down ghost elves.

It's based on behavioral analysis based on a spreadsheet.

You don't have a spreadsheet about you, you don't get a rating.

[Traab]

A -better- way is asking previous landlords and such. I went for years with null credit because of me not going into debt (and paying off student loans et al long enough for them to fall off the report.) Of course, that means I can't buy a house because I'm an unknown renegade who pays all the bills and have lived long enough debt-free to not have a credit report. Completely untrustworthy.
Bankers are incapable of intelligent thought, or at least disallowed from acting on it.

Ehhh I can see the problem. They have no way of confirming you pay your bills on time because you have no record of ever doing so, that automatically makes you a risk. Think of it like car insurance for new drivers. Yes you have a perfectly clean record, but thats because you have never driven before, so its risky to assume you will be good at it right away. Thats why new drivers pay through the nose for the first couple years of clean driving. The bank sees you have never been in a position to make regular payments so they dont know if you can and will or not. It sucks for you, thats true, but that doesnt make the bank stupid.

[Agi Hammerthief]

The bank sees you have never been in a position to make regular payments so they dont know if you can and will or not. It sucks for you, thats true, but that doesnt make the bank stupid.

and the (not so) funny thing is:
the higher risk they think you are, the more expensive the loan.
which by itself increases the risk of you defaulting.

[Radar]

and the (not so) funny thing is:
the higher risk they think you are, the more expensive the loan.
which by itself increases the risk of you defaulting.

I am more and more happy that I live in a place, where none of that credit rating insanity is a thing as this sounds like a catch 22: to get a reasonable credit, you have to have a credit first. Where I live, previous credits may affect how big a loan you could take but not the cost of it. Even for a mortgage you only need to submit employment papers and some confirmation of how much you earn. You do have to pay from 10% to 20% of the house price from your own pocket though, so the bank is pretty secure there.