SugarCatDestroyerThe Reality of Digital ID... But I'm afraid that this kind of crap will end up happening not only in the UK.
9point6I find this kind of sentiment a bit funny, because we already have much worse
Credit scores are opaque ratings of people kept by private organisations used to refuse business to people effectively based on their spending & borrowing behaviour, many of these will now happily encourage you to link your accounts so they get itemised data from some people now too.
This could literally be happening today and they would just need to say “sorry your credit isn’t good enough”. Credit score factors into your ability to rent & buy accommodation in the UK already.
There’s no reason for these companies to switch to using a government ID for these kinds of decisions because that would have to be a more transparent process and less easily used to their benefit.
FWIW, I’m against mandatory ID even though we effectively already have it in the form of national insurance. IMO the ID being digital should be a non issue as long as it’s optional (there also needs to be a free physical version of any national identity for those without phones).
Credit scores are opaque ratings of people kept by private organisations
They are only opaque to the extent that reduces the ability to game them. It’s very common knowledge what the primary factors are that determine your credit score:
used to refuse business to people effectively based on their spending & borrowing behaviour
“Refuse business” is deceptively overbroad—no entity will prevent you from fully paying for something in cash based on your credit score, for example. But they may refuse to lend to you, if you have a history of failing to repay money that was lent to you in the past.
There’s nothing shady about that, it makes perfect sense for one to be less willing to lend money to someone who has a reputation of not repaying their debts.
Without a credit score or similar system, lenders either will:
Credit scores are purely beneficial to good/reliable borrowers—it seems that invariably, those who have the biggest problem with them are unreliable borrowers who really wish they could hide the fact that they don’t repay their debts from the next entity they intend to get more ‘free money’ from.
One caveat. You do get dinged on your credit score if you are too responsible with your credit. You get dinged if you don’t carry a balance on your credit card. Credit reports ultimately rate how profitable you are to lenders, not how responsible you are with credit.
One caveat. You do get dinged on your credit score if you are too responsible with your credit.
Untrue. I’m in the 800s, and all I did was consistently pay off my everyday-use credit cards every month.
You get dinged if you don’t carry a balance on your credit card.
Absolutely false:
Carrying a balance on a credit card to improve your credit score has been proven as a myth. The Consumer Financial Protection Bureau says paying off your credit cards in full each month is the best way to improve your credit score and maintain excellent credit for the long haul.
Credit reports ultimately rate how profitable you are to lenders
No they don’t, or else I, who has literally only profited off my credit cards via the combination of never paying interest, and utilizing cash back rewards from regular use, wouldn’t have a credit score in the 800s.
not how responsible you are with credit.
Explain my 800s score, then. They’re making literally negative profit from me.
If someone has one credit card that’s always maxed out, and while they’re always making payments on time, they’re minimum payments, so they’re accruing essentially the most interest they could possibly be accruing, I guarantee that person’s credit score is much worse than mine, even though there is no arguing that this hypothetical person generates way more revenue for the credit card provider. That refutes your assertion from the other direction.
And that’s without even mentioning how significant a negative influence 100% utilization has on the score.
No, you are incorrect.
This is a screenshot directly from a credit report disclosure from a current mortgage application. This type of credit report is much more accurate than the ones you get from a free site, as they are the version of the credit report actually used by a mortgage lender.
I do the same strategy you do. We don’t carry a balance on our cards. Usually the only debt we have is our mortgage. And yet, clear as day, the credit report disclosure clearly indicates that our score took a hit because we don’t carry a balance. I also have a plus 800 credit score, but it would be higher if I made a habit of paying the bank lots of interest income.
the credit report disclosure clearly indicates that our score took a hit because we don’t carry a balance.
Are you paying your cards off before the statement cycle ends? “No recent revolving balances” means your cards are at literal $0, and have been for 3+ months[^1]. You should let the statement cycle end with the balance of whatever you used it for, then pay it off anytime between that day and your due date. As long as you pay it off no later than your due date, you’ll still pay no interest, but paying it off before the statement ends prevents the agencies from even realizing that you used the card at all—they can’t see your credit card activity, they’re just provided the statement balances.
I also have a plus 800 credit score, but it would be higher if I made a habit of paying the bank lots of interest income.
No, it wouldn’t. Also, if you’re over 750, any further increase is ‘gravy’ anyway, almost no lender has a tier higher than that. The highest ‘breakpoint’ I’ve ever seen is 780.
[^1]: And this is only an ‘adverse effect’ insofar as, after that amount of time, you’re looked at the same as someone who doesn’t have those credit cards at all.