Funny story:

Rocket mortgage fraudulantly tanked our credit score and refused to fix it. The other bank's underwriting department looked at it, shrugged, and honored the mortgage office's request for an override to give us the best available rate.

IMO, Credit ratings are theater.

I had $60k in the bank and was paying $12k down on a used car that cost $28k and would be worth $30k the second I had the keys (the dealership seemed to low ball it a little, probably because they were a new volvo dealership with one GTI on the lot they had for like a couple months that they needed to get rid of), but no, they still needed to check my credit, which at the time did not exist, and still required me to sign up to $2k interest payments over a 5 year loan that would have been more profitable if I never paid a cent and they could reposes the collateral.

I know there are contrived ways I could have killed the value of the vehicle before the loan was done and they couldn't recoup it, but like, come on. My credit report was BLANK. It was never needed in the first place.

> Only when it drops off your report, which is 10 years after you pay it off.

I haven't seen what happens at 10 years, but there's definitely an effect after about a year; mine dropped 50 points, which isn't really tanking, but could switch you into a different risk category depending on where you started. Finishing up my car payments didn't help either.

Credit Karma isn't a real score.

Who said anything about them? This is on scores reported in my online banking.

Then your online banking is using the same fake score as Credit Karma (usually called VantageScore or something like that)

If you actually want to get the score that lenders use, experian.com will give you your FICO 8 score. This score considers all accounts open the same until they have been closed for 10 years.

One of my banks says:

> The FICO® Score pulled on [date] is the FICO® Score 8 based on Experian data, and is the same score that [name of institution] uses, along with other information, to manage your account.

Another says:

> The score provided here is FICO® Score 8, which is based on TransUnion® data and may differ from other FICO® Scores. Variations may also occur when your score is based on data from another consumer reporting agency or calculated at a different time. [name of institution] and other lenders may use different scores and other information in credit decisions.

I'm not going to intentionally interact with Experian directly, unless I have to, so not going to compare there. From what I recall, when I last opened a loan and they disclosed the scores, they were within spitting distance of what I was seeing from my banks at the time.

Now maybe FICO 8 score means something different than FICO Score 8; these guys like to be deceiving, and maybe some banks give the VantageScore, but mine seem to give a FICO Score 8.

Why do you consider yourself an average consumer?

I would love to see some data about this but it wouldn’t surprise me if many USA residents don’t have a credit score at all, or if they do, it is very minimal. Given how many are underbanked, I wouldn’t be surprised if the average credit score is heavily skewed by the people gaming it.

Anecdotally, neither me nor my partner have a credit score. I know several people where I’m living that are permanent renters/get owner financed loans, buy used cars with cash (or are simply given old cars, or don’t have a car at all).

I did a superficial search and found some census data (https://www.census.gov/data/datasets/time-series/demo/cps/cp...) but I have no idea how to read it.

Edit: Looks like my suspicions have some merit:

> 22% of Americans do not have a credit score. Half of this percentage has a stale credit score that makes it impossible to generate a valid FICO score while the other half do not have any credit file with any of the three credit bureaus—Equifax, Experian, and TransUnion.

> 18% of Americans have credit scores that fall in the 580-669 range of “fair.” those in the fair range are considered sub-prime and have lower chances of qualifying for a loan or getting better interest rates.

https://comparecamp.com/credit-score-statistics/

Paying off your mortgage won't "tank" your score.

I paid off my mortgage almost 15 years ago. I have zero debt, no car loans or anything, and pay off my credit cards in full every month. My credit lines are barely utilized (single digit percentage.) My score seems to vary from 790 to 810.

Using credit cards and paying them off is keeping ytour score up.

If you have no debt and pay cash as you go for your expenses, you will eventually drop because the credit bureaus will have no recent data to compute a score.

I posted on my sibling that 22% of Americans have no credit and of the ones that do have credit, 18% have a subpar credit score. That sums up to over a third of Americans that the credit system is either working poorly or not working at all.

Maybe you are indeed an “average consumer” (whatever that means) but if you are, then the credit system is heavily skewed in your favor, with many “non-average consumers” falling by the wayside.