Comment on Anon tries to understand credit scores
merc@sh.itjust.works 1 week agoAlso worth mentioning: what’s the alternative?
If there are no credit scores but there are still loans, the banks / entities making the loans have no real way to know if their loan is going to be paid back. Because of that, the loans are a lot more risky. What happens when a loan is riskier? The interest rate is higher, or people are just outright rejected.
Candice_the_elephant@lemmy.world 1 week ago
Either or, depending on the risk tolerance of your lender.
A low limit credit card with 0 interest if you pay off in full before it’s due is a great way to build your credit score.
RamenJunkie@midwest.social 1 week ago
Yes, but why is this game even required?
alternategait@lemmy.world 1 week ago
And the likelihood is that the people who are outright rejected will follow unfortunate patterns.