And like every other weekly/monthly article on this same subject, this one fails to mention the two steps that will do more than anything else to improve your credit score:
1. Get yourself a massive annual income, and
2. Acquire scads of wealth.
"But wait," says one of the few people who clicked through to read the article and managed to get through it despite that I've-read-this-same-article-many-times-before haziness all such pieces now exude, "didn't I just read that salary is not a factor in your credit score?"
Well yes, salary is not, in itself, a variable:
The agencies calculate your score based on a complex formula that factors in payment history, credit history, outstanding debt, the types of credit you use and the amount of new credit. The scores do not take age, sex, race, occupation, salary, marital status or national origin into account.
But notice all those things that are variables in this magic formula: "payment history, credit history, outstanding debt, the types of credit you use and the amount of new credit." All of those factors are strengthened if you're rich, and weakened if you're poor.
I'm not suggesting that credit scores are designed to punish the poor and reward the wealthy. They're not. They're designed to distinguish between the responsible wealthy and the irresponsible wealthy. And they're designed to punish everyone not deemed to be among the responsible wealthy.
So what Anatole France said of the law is also true of credit scoring: "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets and to steal bread."
The impact of this majestic equality is that poor people are charged more than wealthy people for housing loans, auto loans, student loans, home insurance, auto insurance, renter's insurance, even for security deposits and rent.
Credit scoring is a cooly efficient mechanism for redistributing wealth, for increasing economic inequality and decreasing equality of opportunity.
As the chasm between rich and poor widens, one response is to try to make sure that you and yours wind up on the happier side. That's what these recurring articles are intended to help you do.
These articles all presume that this is just the way it is and we have to accept it. They accept the dubious authority of the triumvirate of credit scoring agencies — the self-appointed, unelected judges claiming jurisdiction over all of us. They treat this social engineering as though it were an inevitable fact of nature. And dazzled by the sham concreteness of a dubious formula, they confuse plutarchy for meritocracy.
These helpful articles assure us that if we'd just row faster the taskmaster will let up with his whip.
Thanks, but who is this advice really helping?
We don't need any more of this kind of help. What we need instead is something more like this:
Just a minute – just a minute. Now, hold on, Mr. Potter. You're right when you say my father was no business man. I know that. Why he ever started this cheap, penny-ante Building and Loan, I'll never know. … But he did help a few people get out of your slums, Mr. Potter. And what's wrong with that? Why … Here, you're all businessmen here. Doesn't it make them better citizens? Doesn't it make them better customers? You… you said … What'd you say just a minute ago?… They had to wait and save their money before they even ought to think of a decent home. Wait! Wait for what? Until their children grow up and leave them? Until they're so old and broken-down that they … Do you know how long it takes a working man to save $5,000? Just remember this, Mr. Potter, that this rabble you're talking about, they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn't think so. People were human beings to him, but to you, a warped, frustrated old man, they're cattle.
(That's not "shrill." That's "Capraesque.")
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