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[–] 1 point 8 months ago (3 children)

Also worth mentioning: what's the alternative?

If there are no credit scores but there are still loans, the banks / entities making the loans have no real way to know if their loan is going to be paid back. Because of that, the loans are a lot more risky. What happens when a loan is riskier? The interest rate is higher, or people are just outright rejected.

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  • [–] 2 points 8 months ago* (2 children)

    Either or, depending on the risk tolerance of your lender.

    A low limit credit card with 0 interest if you pay off in full before it's due is a great way to build your credit score.

    Just buy stuff on it you'd normally buy without credit, then pay it off ASAP. And you'll build a reliable reputation as someone who can handle credit. Just don't spend more than you can pay off by the time it's due.

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