It seems that our US dopers frequently discuss their credit scores and it appears to be something they keep top of mind with respect to their personal finances.
I’m a Canadian, in my early 50s, and I’ve never once thought of my credit score. I’d even have to google if we have them up here. I’ve had plenty of credit cards, a mortgage on whatever home I had at the time - typical middle class stuff. Lenders have never asked for it.
So, my proposed MPSIMS discussion points are:
Canuck dopers - Am I missing something?
Dopers outside of the US/Canada - does your credit score mean anything where you are?
Dopers inside the US - just how much impact does a good/bad credit score have on your daily life?
US here - Lenders don’t ask for the credit score from the client, they get it from the credit reporting agencies and then can tell the client what the credit score is. Individuals can find out their credit score from the same reporting agencies if they like, but in the long run, it really doesn’t mean much except to get people to pay for personal credit reporting services. The credit score is not the only thing lenders take into consideration when deciding to grant loans.
No, I don’t care what my credit score is. It does not affect my life at all. But I am squarely middle-class and have nearly zero debt, so there’s that, I guess.
Credit score doesn’t have anything to do with daily life. A credit report matters you’re applying for a loan, applying for something loan-like (like cell phone contracts), applying for a job (especially in finance), and things along those lines. Lenders never ask for your credit score, they pull a credit report from a service which tells them the score. There wouldn’t be any point in asking you, that would be as useful as ‘are you gonna pay this back?’ (everyone will say ‘yes’). There are actually several different credit scores, and lenders typically look in more depth than just the credit score number, but it’s often a quick ‘should I bother looking deeper’ check and serves as a good shorthand for how healthy your credit is overall.
If you’ve kept credit cards and a mortgage, only carry a reasonable amount of debt (or none), your credit score will be high enough that it won’t be a barrier to stuff you’re wanting to do, so if you were in the US you likely still wouldn’t have to deal with it directly. Fixing credit has to do with clearing off erroneous entries, late payments, defaults, collections, and the like, if you don’t have any problems along those lines then you wouldn’t need to be concerned with the score. A lot of people manage their money very badly, though, and so have to do a lot of work to get things to the point where someone will want to give them a loan at reasonable rates. (Yes, some people actually have a catastrophe out of their control, but the majority of people that I’ve known with credit trouble other than major medical bills are awful at managing money or taking advice on managing money).
Some financial institutions will give it to you for free - my credit union automatically checks reports (I think it’s quarterly) and puts the score in with my account summary.
Note that there are a plethora of different scoring models, including dozens by FICO alone, and they have different costs. The free scores provided by finance companies and sites like Credit Karma are not necessarily the same that a mortgage lender or car financer might use, which cost a lot more. A lot of the credit card companies are now providing the VantageScore model for free, which actually isn’t from FICO at all. (But it has the same range, and the scores will be highly correlated since they measure the same stuff.)
Canadian too. No idea what my credit score is. Never had any influence on anything I have done, so it must have been high enough. Like the OP, I find that the Americans tend to mention it more. Not sure if this is a “thing”, and if it is, why it should be, but that’s just my anecdotal impression.
I maintain a very high credit score (829 out of 850 according to Credit Karma today) but that is only because I use credit card offers targeted towards people with great credit to get free trips and other bonuses. Other than that, you don’t get any trophies for having a really high credit score other than the peace of mind that you won’t be turned down for a loan (or possibly a job) for that reason alone.
Anything higher than 720 is good enough for most purposes. It is just one criteria of several and doesn’t include things like income and employment history which are even more important to most lenders. Lenders and sometimes employers use them mainly to screen out the people with really low or nonexistent credit scores because that is a big red flag that something is wrong.
Even in the U.S., someone can go years or decades without their credit score mattering one whit if they don’t need to apply for new loans. You also don’t need to keep it as high as possible at all times either. It is only important when you know you will need to apply for something that checks it.
In Spain there is no such thing as a credit score that anybody can check and which will be used by many different agents.
There is a registro de morosos, a list of people who have been late in their payments (enough for collection proceedings to be started); names drop off some time after the debt has been paid, cancelled or otherwise closed. Lending institutions will check if you appear in it as part of the application process but will otherwise use different criteria to decide whether you are loan-worthy.
For example, when I applied for my mortgage, ING Direct refused it because I had been less than two years in my then-current job. I was perfect otherwise, and the job market at the time made that particular rule pretty stupid (fat cows, anybody who got a better offer took it). Three other banks didn’t even ask about that, just if I had income (yes), self-employed or employed by another party (another party) and a copy of my last payroll itemization (if I had been self-employed, it would have been proof of payment of social security and my last quarterly).
Canadians certainly are affected by their credit scores. Here is some information. I am a little ashamed to admit that I knew about checking the R-score from watching Till Debt Do Us Part.
Our scoring is very nascent and is specific to the loan product. For non-documentary loans like credit cards, one’s demography and credit record will suffice. Card companies already figured out the probabilities. However, interest rates are outrageous, since current card holders have to finance the delinquent ones.
The “Credit Score” is the FICO (name of the organization which calculates it) and is used only in credit, rental, and, it seems to me, employment.
If your score is good (650 minimum), it is not important. If your score is below 600, things get dicey. I was required to put down a huge deposit to get a crummy apartment. You want a credit card? See: “Secured Credit Card”. Mortgage? Hee, hee…
Kinda like “sex in marriage: if it’s good, it is not a big deal. If it’s NOT good, it IS a big deal.”.
Canadian also. I’ve only ever needed a credit score when I’ve bought real property and took out a mortgage. Buying a car or renting an apartment? Nope.
British, and our credit scoring sounds like it works pretty much like the US - it’s used by all sorts of companies to check your credit worthiness – not just mortgage companies, but also banks, letting agents, car finance etc etc.
It’s not really a topic of conversation, and most people wouldn’t know their credit score unless they’re applying for something big like a mortgage and are curious to know if they’re ok.
I have no doubt that we Canadians are affected - it is just that, at least in my admittedly totally anecdotal experience, we tend not to know much about it, or talk about it.
In conversation with my American friends, I have noted that it is an issue that many of them seem to be at least aware of, and in some cases, actively track.
The relative levels of knowledge or interest in this issue seem to be different. Again, I don’t have any idea why.