FICO to incorporate buy-now-pay-later loans into credit scores

They didn't before? It's a credit like any other type, increasing debt burden like any credit. Seems like corru... ahem, lobbying of course. :)

They can't keep up with techbros coming up with new names for debt.

Read the article and approach, the BNPL is going to be in effect like one credit card opened per transaction.

Yep you're onto something here but surely they operate within legal reasonable frameworks of the government surely.

They also didn’t destroy people’s credit when they got upside down and had to return the $5k couch or $15k car they were talked into buying on their fixed income, but that’s usually “other people” problems.

Being "talked into" is one hell of an excuse not to take accountability for your own purchases.

If the DOD can't do it, why should poor people? https://americanmilitarynews.com/2024/11/pentagon-fails-7th-...

Regardless no one can make you buy anything

Your credit score can decrease if you pay off your credit card balance or pay it down too quickly. For example, paying off the last $10k on a home loan. The score is also a reflection of your value to them as a paying customer. How much money you can make them, and how reliable you are with regular payments based on past data. These types of businesses may seem off, but if the customer is reliable and makes you money, assigning a low score based simply on the business type is a recipe for litigation.

That is true when you close an account (like paying off the last $10k on a home loan), but I don't think that is correct when paying a credit card down to a $0 balance and leaving it open.

The reason is that your credit score is impacted by both your available credit (higher is better) and credit utilization (lower is better). When you pay of the last of a home loan and close that account, your available credit goes down and your credit utilization goes up (assuming you had any other debt). Both of those hurt you. When you pay the credit card down to $0 and leave it open, your available crediot stays the same and your utilization goes down.

Yeah, paying $10k off your home loan makes your credit score go up if it isn’t closing the loan.

There's no lobbying necessary, because FICO isn't a government agency, its a private company. Why we have a private company determining such an important thing with minimal government oversight is certainly a question we could be asking.

That being said, there's an innocent explanation for this specifically. BYPL is pretty new as a common type of debt (became popular in the last five years). They're putting it into FICO 10. The last time they updated FICO was FICO 9 which was released in 2014, before that there was FICO 8 in 2008... a lot of banks are still using FICO 8 or even earlier models. Banks are slow to change, and FICO moves slowly because banks don't want their models upended every year. Fwiw if the government was more involved in this I doubt it would be taken into account any faster.

It's crazy how many things that require credit are on a self report basis. And the only time they actually report is for a past due debt and not successful payments.

> Your credit score can decrease if you pay off your credit card balance or pay it down too quickly

It can have a short term impact, sure, but long term (a few years), your score will be fine. I paid my last student loans years ago and I did see a sudden score drop and not I'm sitting right below 800 with no debt.

I doubt most people would pass a financial audit, unless they had built their life around "proper accounting controls". Of course, if they had an incentive to do so, it probably would only take two or three years to get things in place and consistent. But then, most people don't have 1.3 Million active employees [1], who knows how many contractors and retirees. The DoD's finances were not designed around audit requirements and it takes time and consistent attention to retrofit accounting controls into a very large organization.

[1] https://dwp.dmdc.osd.mil/dwp/api/downloadZ?fileId=136507&gro...

Ok, but the point is: people whose job it is to be accountable, cannot

Blaming poor people for being scammed only benefits grift culture.

But since this site is essentially a growth engine for grift its unsurprising to find parrots of this "poor people are moral and ethical inferiors"

You’re so right, and that is exactly why we don’t have an entire class of jobs whose purpose is to get people to spend more than intended. Yup, all personal responsibility. 50% of people having less than a middle school education level, but you’re totally correct, it’s just ALL personal responsibility. No other factors at all!