Credit Scores are fucking dumb.

I'll be honest, it really pains me to even write about this, but I'm really trying to step outside my comfort zone with my content. The Zealy campaign by LeoFinance is the main reason, of course. We're all out here grinding away at our chance to win $10k and 200k HP delegations. So, that lead me to make a video the other day talking about credit scores...

Personally, I think credit scores are fucking dumb. Why should my ability to purchase shit depend on some centralized companies deciding what I can do with my money? See what I mean? Say you have $100k in the bank, and you want to purchase a house. You can't afford to pay full price because you simply don't have $300k. Your credit score is shit though, and no banks want to give you a loan to make that purchase. What the fuck?

You can argue this in some cases for sure, but I'm speaking generally. If Experian, TransUnion, and Equifax say you have a shitty score, guess what? You can't get approved for anything even if you have the money to buy it. Want a credit card? Fuck you. No. You can't have it because we say so. This is something I've dealt with having shitty credit by making poor life choices as a youngster. It really sucks.

All of this is to say... I think having a credit score based on something from 10 years ago is kinda ridiculous. In my opinion, if you can prove that you can afford to purchase something, you should be able to purchase it. If you have the income to cover the cost, cool. If you don't, you don't. But that's just one thing that credit scores can affect in your life.

Unfortunately, no matter how fucking dumb the concept is, credit scores are important. Let's talk about why.

Limited credit access

As I started off by saying, you'll be extremely limited in access to things like home loans, auto loans, and credit cards with a bad credit score. Determining what is a good or bad credit score is up to the powers that be, but we all know... Number go up means good. Number go down means bad. Pretty simple concept. Credit scores can range from 300 - 850, and your average person probably falls in the 500 - 700 range. This is considered "fair" credit.

People in this credit score range often experience shit like increased interest rates or higher fees to open accounts. You can probably get some credit cards, but some will require security deposits and such. The dumbest part about this is that each credit bureau scores your credit differently. So what Equifax decides your score is will likely be different than what TransUnion decides your score is. It's pretty hard to tell where you actually fall.

If you're in this category, you probably have a little debt as well. Debt isn't necessarily a bad thing, as long as you can afford to pay it. Younger people often fall into debt very quickly when they get access to credit cards and loans. This is what happened to me. I was young and dumb. I spent money I didn't have on dumb shit without realizing that interest was going to make it impossible for me to pay the debt.

I wrecked my credit and didn't know what to do. A few years ago, I decided to be an adult and file for bankruptcy. This was one of the best decisions I ever made, really. I had a chance to start over. I had a chance to strategically build my credit score up because I had a much better understanding of how it worked. It cost me $2k but it was well worth it to clear me of my debt. Now I'm doing quite well with it, which is great because I want to buy a house soon.

Low credit scores can even impact your ability to rent apartments and shit. That's fucked, but it's a reality. I've experienced it.

Rental issues

I really want to stop moving. Apartments are dumb expensive, the prices continually rise, and I'm ready to settle down at least for a minute. I've ran into issues renewing a lease at a place I already lived for 2 years because I had bad credit. Tell me how the hell that makes sense. I've lived here 2 years, I've paid my rent on time every month, and I've never had any complaints. Yet I can't continue to rent because you checked my credit after a management change. This is the kind of shit I'm ranting about.

Forget buying a house with bad credit. People say it's possible and I'm sure it is. For the average person, though... This will be nearly impossible. I don't know shit about real estate, but I know you need credit and capital for making a purchase. Why the hell your credit score matters when renting a place is beyond me, but that's just the reality.

Insurance rates

One you might not even think of is the fact that you're probably paying a higher insurance rate on your home or vehicle if you have bad credit. Another mystery to me as to why it matters, but it does. They want to make sure that they gouge you for as much cash as possible because you're more likely to file a claim than the guy with the platinum American Express card.

Charging someone more that can less likely afford it is kinda ass backwards, in my opinion... But alas... I'm just a dumb guy on the internet that should probably not give any kind of financial advice. I'm gunna do it anyway. Fix your credit. That's my advice.

But how?

Simple. Get credit cards that will allow you to. Put small balances on them like gas or food for the month. Pay them off every month. Easier said than done for most, but it's doable. There's also things like Self which allow you to pay into an account and use the balance to open a credit card. Chime bank allows you to get a credit builder card with no credit that works like a debit card. These are the way to boost your score from the ground up.

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