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Anon tries to understand credit scores (sh.itjust.works)
submitted 3 days ago by Early_To_Risa@sh.itjust.works to c/greentext@sh.itjust.works
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[-] damnedfurry@lemmy.world 5 points 3 days ago

taking out loans and paying them back is the most well known way of raising a credit score.

This is so much the case that many financial institutions have "credit builder loans" which are essentially a loophole for building credit, where you're given a 'fake loan' that you repay, then you're given back your payments at the end of it. Meanwhile, the credit reporting agencies see that you took out a loan and faithfully repaid it, so your credit score goes up.

One arguably unjust part about credit scores is that the actions of people related to you, or simply sharing the same surname as you, can affect it! E.G i have heard that a friend-of-a-friend’s dad took out too many loans and now their credit score suffers.

It doesn't work that way, at all. Credit scores are individual. Either that person is mistaken, or they were a co-signer on one or more of those loans (which makes them matter to their score also).

Anyway if it’s true that the actions of other people can affect your credit score

It's not, they can't.

[-] FinjaminPoach@lemmy.world 2 points 3 days ago

It doesn’t work that way, at all. Credit scores are individual. Either that person is mistaken, or they were a co-signer on one or more of those loans (which makes them matter to their score also).

Thanks for fact-checking me man, I did start to think I'd got the wrong end of the stick while writing it.

[-] laurelraven@lemmy.zip 2 points 2 days ago

To be fair, your credit score can be affected by someone else's actions if the credit tracking agencies screw up and think you're the same person... This is hopefully harder to happen now, but my mother and her brother had the same initials in a different order and their SSNs were different by only one number and somehow the credit bureaus messed up and it was a headache getting that untangled.

That said... Yeah, that's absolutely not how it's supposed to work and if it happens it's because someone somewhere screwed up.

Now that it's all computerized, the odds of that happening should be pretty slim, but things do still go through a human's hands at some points of the process so it's still not impossible.

this post was submitted on 27 Dec 2025
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