Hacker News Reader

Credit Card is everywhere associated with debt

In the US, having debt is seen as a good thing, as long as you stay current on payments. Not having debt gives you a lower credit score than having debt, which send kind of fucked up to me.

That's a common misconception. Credit score is positively correlated with paying on time, having high available credit relative to usage, and the age of your oldest credit account.

However, using more of your cards' limit (a high debt utilization ratio) actually reduces your score.

On-time payments are only one factor in your score. Depending on the model it may only account for 20-30% of the score. Using your cards a few times a year may satisfy the criteria. You don't have to take on any debt to have a high credit score.

can 100% confirm this on a personal level, outside of mortgage I have no credit card balances (I use CC extensively but always pay the full balance) and have had 835+ score for years now.

Yes. They want you to have the mortgage and the cards, and the record of paying them on time. If you had no mortgage and never had the credit cards, your score would be much lower.

I've had a high score with only credit cards and low usage.

That's what it technically is. Credit.

Reply on news.ycombinator.com