I think it’s only recently that more people know what theirs is. I used to check my credit reports (for fraud) but I never saw my scores because they charged for that. Otherwise it only came up when seeking a loan for a house or vehicle.
My understanding is that now there are free ways to check. But I’m not up to speed on this.
Now every bank/credit card/loan has a “click here for your credit score” button. I get emails from my bank telling me if my score has changed.It’s being pushed to the forefront.
StG
Since starting this thread, I’ve investigated credit scores in New Zealand and found there is a free credit report. It gave me a reasonable score despite having very little information about me (I’ve only been back in the country for the past two years.)
I feel like I’m getting a sternly worded lecture here & I’m not sure why.
I don’t disagree with anything you said, but the OP’s post was not about the importance of Americans keeping their debt down. It’s about why the obsession with a single number?
My argument is simple - Americans consume lots of social media and credit score companies advertise a lot on SM and have convinced young people (like my daughter) this single number score is all lenders care about.
As @Omar_Little says, Canadians do have credit scores, but few lenders accept or reject you based solely on it as the credit check social media ads imply. Even if you score is low they will ask why and ask for proof of income etc. (BTW - I’m not suggesting USA lenders are any different than Canada or other countries)
As I explained to my daughter: when she goes for her first car loan, they are not going to accept or reject her based solely on her single number credit score (as she seems to think). They will look at that plus her holistic debt to income number. As you correctly note, she needs to manage that.
This whole obsession is a totally social media advertising driven behaviour.
The thing about social media advertising (any online advertising) is that it’s highly individual, so I don’t think you can generalize your daughter’s experience of ads to everyone. I also consume a lot of social media and I can’t think of the last time I saw something related to credit score.
I know my credit score because when I have applied for a loan, they tell you what it is.
I don’t think it’s worth obsessing about, but it probably is worth paying attention to. A higher credit score can result in a lifetime of slightly lower interest payments and potentially better rental or job opportunities.
Your argument is flawed. The score was hugely important before the internet - social media just means its importance in US culture is on display. It’s well known that the majority of Americans live on credit, which means your creditworthiness is significant.
I don’t know the authoritative answer to the question, but all I can say is from my Canadian perspective, in my lifetime I’ve bought and sold quite a few houses (all the purchases requiring mortgages), have a number of credit cards (one with a ridiculously high credit limit), several lines of credit, etc. – all the usual stuff – and I have never once in my life known my credit score, or had any reason to be interested in what it was. I do recall seeing some stupid singing commercial a couple of times about getting or improving your credit score or something which was probably from a US TV station.
Credit scores certainly exist in Canada and at least two of the same credit bureaus – Equifax and Transunion – operate here, but I never had the impression it was nearly as important as it is in the US. To this day I have no idea what mine is, and couldn’t care less, and it’s certainly not because I’m rich.
I reached adulthood in the 1980s and recall all sorts of info about nurturing your score, including writing the credit agencies via snail mail to check it once a year. Most definitely, I’ve seen it threatened since then ala “Failure to do such and such may negatively impact your credit score.” And most definitely here, a bad score can mean you’re screwed, in spite all other positives; friends and family have gotten letters that pretty much say “Nope, your credit score sucks.”
I’m not American, so I defer to your knowledge. I had assumed that US lenders were the same as Canada and looked not only at your credit score, but also your overall holistic debt / equity numbers.
I stand corrected.
It is my understanding that your “overall holistic debt / equity numbers” is one of the major factors in your credit score. So if they consider that again, it is somewhat double counting, but if that is what they want to do, they definitely can.
You still have to be able to afford the loan. I refinanced this spring and they very much cared about my income and whether I was still employed. Regardless of credit score.
Credit agencies do not have access to your income or your bank balance information. They only have access to how much credit you have, your history of managing that credit, and any complaints that your creditors have filed against you.
As @Ruken points out, lender want to know about your ability to pay back the size of the debt that you are seeking. Your credit score for most people will not determine if you get the loan or not, but how much your interest rate will be.