Interest in credit scores, unique to Americans?

In My Humble Opinion
1

I follow a Facebook page on budgeting. A lot of the posts are from people asking for advice on maximising their credit score. Questions are about things such as whether to pay off cards immediately, wait for the bill, leave a balance running etc. The page is primarily American.

I have never had an interest in my credit score and wouldn’t know how to get it if I wanted it. When I’ve needed a loan, mortgage, new credit card etc, I’ve applied and been approved.

So is the interest in credit scores unique to Americans? Do other countries citizens have the same interest? If it is unique to America, why? I realise the Facebook page is self selecting.

2

Yeah credit scores are a thing in the UK and you can subscribe to credit checker services. I have a feeling they are not used here as aggressively as they are in the US however. But you’ll definitely struggle to get credit if you’ve trashed your credit score.

3

I think the obsession with credit scores (as opposed to simply have good credit or not) started as a very American thing and also skewed younger. I think it’s now spreading, driven mainly by social media advertising etc.

We’re Canadian and my 23y/o daughter is absolutely obsessed now with her “score number”. She asked me what ours is and I had no idea, she was stunned. “Everybody knows what their credit score is!!! What’s wrong with you???”

I told her I have literally never known my “score”. We’ve never once applied for credit / line of credit / purchase where someone looked at a black and white score number and accepted or rejected it. In Canada (at least) they look at your holistic debt vs income situation.

I then told her she was spending way too much time on social media.

4

In Norway at least people have fewer interactions with entities that do credit checks, either because access to them is more restricted or because it’s not “how things have been done”. Applying for a loan or a line of credit is basically the one thing.

My impression from looking online is that credit check companies are trying to create the idea of them being super important though, and I don’t know exactly what the current EU regulations are or where they’re headed.

5

Even if that’s all they look at. If you looked in the same place they look to find all this debt, and worked to knock some of it down or asked which one you should pay down the fastest, or found debts that didn’t belong to you on that list and worked to get them removed…that’s all we’re doing when we’re trying to increase our credit score.
Even if you don’t have an actual credit score the same way that we do, I assume it’s still a good idea to keep your overall debt down and make sure other people (by accident or on purpose) have debt in your name.

We might be focusing on a single number, but in the end, everyone (in the US or otherwise) is trying to keep their debt down.

6

I think credit scores are important because they can be used to deny rental applications, car purchases, and even jobs (though I understand more states are trying to push back against this). Also, wages are stagnant, rents are high, education costs are high, healthcare costs are high, and welfare is not comfortable. So people here tend to be cash poor a lot and they need credit to maximize purchase power.

7

I don’t know if “obsessed” with credit score is the right expression although it is interesting how there are subscription sites where you pay to find your score yet ScotiaBank and Royal Bank have your credit score page as part of their on line banking service at no charge. (so far)

8

In Canada, if you apply for a mortgage loan, auto loan, etc. the lender is going to run a “hard” credit check on you to determine your FICO score. Yes, they are going to ask you personally as well, what your income is and debts that you owe, but if that isn’t consistent with your FICO score, you will not be getting that loan. They will assume that you are lying to them and rely on the FICO score. You have been fortunate that your credit hasn’t been hacked so far.

The primary reason that Americans should check their credit score, is due to identity theft, etc.

9

I think most Americans are somewhere in between you and your daughter. I have never heard of people obsessing over the number like its their personal batting percentage, but most people have an inkling of where they are generally and what it would take to make it higher.

10

Wait, what? When I said I thought the US used credit scoring more aggressively I had no idea it went that far. Wow.

11

Yeah, it can. It’s stupid, and it’s never happened to me or anyone I know personally, but I’ve known of it happening to friends of friends. To be fair, it’s somewhat uncommon and typically involves jobs with financial responsibilities or jobs that require government clearances.

12

when I worked for DoD–not in high security area!–a garnishment would get you fired on the spot

13

Yeah if your credit is bad enough (not necessarily the score, but similar factors like delinquent payments) they might not let you enlist at all. If your debt is greater than 40% of your expected income, the Air Force can deny you completely.

14

Yep. Especially if you work in anything involving large sums of money, particularly accounting. I’ve had potential employers run a credit history on me before hire. Refuse and no job.

Also, while FICO is the one thrown about the most, it’s actually a combination of the three major credit bureaus, Equifax, TransUnion and Experian. They all use different methods of calculation and can differ widely in their scoring. A 700 (generally considered a very good rating) from one bureau may be only good in another because their top scores are higher.

Also, some companies only use one the score of one bureau (it costs money to pull a score) and because of the various scoring criteria, your Good score from the bureau they use can make the difference between getting a loan*, a phone or other items.

*Listen to or read the terms of those especially low interest rates. “For well qualified (i.e. those with a high credit score) buyers” is a common term. Lower score, bigger risk of default = higher interest rates.

I (thankfully only) works a few months for a credit union in the delinquent loan department. We pulled the FICO score on members when possible (I think it was as long as it was 90 days since it was last pulled. This is enforced by Federal law). It’s not just a number, but a list of ALL your loans, mortgage, car, credit cards, active or inactive, written off or not and your utility bills.

We would genuinely try to help out the members as much as possible and it wasn’t just just the credit score that was taken into consideration.

FYI, never, ever let you any of your loans, credit cards or utility bills go 30 days unpaid as that automatically shows up on your credit score. I’ve advised members that unless payment was received that day (absolute truth), that once the system updated that evening, their account would automatically send the 30, 60, 90, 120 past due notice to the credit bureaus.

We could request to have it removed if there was glitch, e.g. the money was credited to the members account instead of as a payment, but the past due notice would stay and affect the members credit score for 30 days until the next cycle begins.

15

Tangential post.

I just read that T-Mobile just retired the Sprint name and the article talked about how Sprint lost money for years because of their bargain prices.

It brought back memories of the early 2000’s when I worked a several cell phone stores. We’d recommend Sprint for those with poor credit scores because they where the easiest to quality for. A $500 deposit required for T-Mobile could be $0 with Sprint. Taking on those most likely to fail to pay was apparently one of the issues that caused their downfall.

16

I worked in banking for 20 years - a poor credit score was a huge red flag for potential hires.

17

Makes more sense if you’re hiring in the financial sector i suppose. I wonder if it happens elsewhere?

18

Wow, that’s seriously depressing. Not saying there aren’t plenty of people in loads of debt in the UK, but that list just seems overwhelming.

We have credit scoring in the UK, but if, like me, you’ve taken out loans/mortgages but never got into arrears, it really isn’t something worth looking up.

I registered with a credit score agency when I was mortgage hunting, mainly to see if it affected my interest rate offers. So they have my details, and emailed me last month telling me my score had gone down. It was an ‘eh?’ moment, as I don’t have any personal loans right now. I had just paid off a credit card though, so I assume it was that. God forbid I should be debt free! I didn’t bother following the link to see what my score actually was.

19

I think a lot of people here don’t really notice it, either. Poverty, or being barely above it, can be invisible sometimes. A LOT of people who had jobs were just finding ways to get by, a fact which has been brutally exposed by the pandemic shutdowns, and it’s about to get way, way worse.

Credit helped mask some of this poverty, but it’s about to become an ugly spectacle in some places.

20

I recall asking some years ago on here about credit scores, they were being mentioned as if everyone knew what theirs was and I was a little perplexed by it (UK resident here).
Well I didn’t ever bother taking it any further and can honestly say I’ve never had a conversation with family or friends that has ever involved the subject of “credit scores”.

I’m happy to stay ignorant as it doesn’t seem relevant to me.