Credit Score, How stupid.

[Porcell]

I don't know if it's ignorance or fear, but I don't understand the aversion to credit cards. Just don't be fucking stupid about them, pay them off in full every month, and you'll never pay anything extra. Instead of paying $40 in gas 6 times per month, put it on a credit card and then pay off the $240 at the end of the month. You build your credit that way.

[ScottsdaleHokie]

You only have to make sure that the loan has fixed interest rates, so nobody can fuck you over by selling your loan to someone who's going to raise your rates.

This illegal.

When you take out a loan, you sign a little thing called a note, the terms of which can't be changed on a whim if it gets sold to another company.

[Reeve]

This illegal.

When you take out a loan, you sign a little thing called a note, the terms of which can't be changed on a whim if it gets sold to another company.

I think he's suggesting that if you get a adjustable rate loan, the rate can adjust. So don't get the adjustable rate.

[StayTuned]

This illegal.

When you take out a loan, you sign a little thing called a note, the terms of which can't be changed on a whim if it gets sold to another company.

Go tell that thousands of US citizen who "bought" loans to specific terms and ended up with higher rates within 1 year because banks like Goldman Sachs decided to sell their AAA loans to companies like ASC. Sometimes rates sky rocketed from 7,225 to 8,725; sometimes even higher than that.

Funny thing about that, most of these AAA loans were no AAA, but only A or even B loans... forged to fit AAA conditions.

If a bank today tells you that you are not eligible for a loan, do not take one. Banks have become kinda paranoid since 2008, and they have good reasons to be paranoid.

Buying a new car is a bad idea anyway in my eyes. Leasing is almost always the better alternative. Lease a great car for 300€ per month (you can get some 40.000€ cars for that much) , after 3 or 4 years of using it you end up with some 14.000€. After that, you just give that one back and and get a new one for the same conditions.

Now imagine you have to take a loan over 14.000€ to buy a car on your own (which might not even be as good as the leased car). Thanks to those interest rates you will end up paying more than those 14.000€ which the car was originally worth and, in case you lose your job, you can't just give the car back and be safe, no, you still have to pay off your debt...

[Tinykong]

Credit is such a scam, filed bankruptcy from medical debts related to an auto accident I wasn't at fault for, up until the bankruptcy I had a modest credit history and high interest rates. After the bankruptcy, my score improved by at least 100 points, I refied my car at less than 1% (down from 6 something) and got a credit card from the same company I discharged for almost double the limit.

I know it's because you can't file again for 8 years and they want to trap you, but, kind of screwy.

[Paq]

I agree that credit scores are stupid, not only that, they are fckin pointless.

I have a flawless credit score of 999, I cannot get it any higher, but this does not make my life any easier.

I cannot get credit for anything of worth! I have direct debits (Phone/Internet/Gas/Electricity/Rent) , which I have never missed a payment on, hence the 999 credit score (along with registered polling address and long residency at the same address) but this doesn't help me one little bit. According to the bank, I have no record of paying back a sizable amount of credit so I am high risk.....ironically the only way to do this is to get a fckin credit card or loan, and its one giant circle from then on out!

I earn a decent amount of money, have been in full time employment with the same company for years and I have no where to turn! So big credit scores mean sweet fuck all, I'm screwed until banks unfuck their heads and stop giving money to pointless endeavors and high rolling bankers!

(Little rant over)

[Reeve]

Go tell that thousands of US citizen who "bought" loans to specific terms and ended up with higher rates within 1 year because banks like Goldman Sachs decided to sell their AAA loans to companies like ASC. Sometimes rates sky rocketed from 7,225 to 8,725; sometimes even higher than that.

Funny thing about that, most of these AAA loans were no AAA, but only A or even B loans... forged to fit AAA conditions.

If a bank today tells you that you are not eligible for a loan, do not take one. Banks have become kinda paranoid since 2008, and they have good reasons to be paranoid.

Buying a new car is a bad idea anyway in my eyes. Leasing is almost always the better alternative. Lease a great car for 300€ per month (you can get some 40.000€ cars for that much) , after 3 or 4 years of using it you end up with some 14.000€. After that, you just give that one back and and get a new one for the same conditions.

Now imagine you have to take a loan over 14.000€ to buy a car on your own (which might not even be as good as the leased car). Thanks to those interest rates you will end up paying more than those 14.000€ which the car was originally worth and, in case you lose your job, you can't just give the car back and be safe, no, you still have to pay off your debt...

Leasing is better if you can stay within mileage limitations. But it sucks to have to always be thinking about how much X trip is going to impinge on your mileage limitations. I hate not being able to decide on the weekend that I just feel like a drive out in the country.

[namelessone]

Dude, you are talking about STRANGERS loaning you hundreds or thousands of dollars. Who would YOU be more likely to loan money to: a friend who has a good reputation and asks you for a loan once, or a deadbeat who asks people for money every month and never repays on time? BAM, that's what Credit Score is.

[ScottsdaleHokie]

Go tell that thousands of US citizen who "bought" loans to specific terms and ended up with higher rates within 1 year because banks like Goldman Sachs decided to sell their AAA loans to companies like ASC. Sometimes rates sky rocketed from 7,225 to 8,725; sometimes even higher than that.

Funny thing about that, most of these AAA loans were no AAA, but only A or even B loans... forged to fit AAA conditions.

If a bank today tells you that you are not eligible for a loan, do not take one. Banks have become kinda paranoid since 2008, and they have good reasons to be paranoid.

Buying a new car is a bad idea anyway in my eyes. Leasing is almost always the better alternative. Lease a great car for 300€ per month (you can get some 40.000€ cars for that much) , after 3 or 4 years of using it you end up with some 14.000€. After that, you just give that one back and and get a new one for the same conditions.

Now imagine you have to take a loan over 14.000€ to buy a car on your own (which might not even be as good as the leased car). Thanks to those interest rates you will end up paying more than those 14.000€ which the car was originally worth and, in case you lose your job, you can't just give the car back and be safe, no, you still have to pay off your debt...

Thousands of morons too stupid to first read and UNDERSTAND what they signed.

They're called adjustable rate loans. If you're so freaking stupid to sign your name to a contract without completely understanding the terms, then you deserve what's coming to you. And BTW, don't expect other people to bail you out of your own stupidity.

[Tinykong]

Dude, you are talking about STRANGERS loaning you hundreds or thousands of dollars. Who would YOU be more likely to loan money to: a friend who has a good reputation and asks you for a loan once, or a deadbeat who asks people for money every month and never repays on time? BAM, that's what Credit Score is.

It has nothing to do with people's reputation, and everything to do with developing a system that generates money off people with low income and high risk.

I worked as a consultant for a construction company a few years ago, and they were trying to get financing to build a horse vet, and Cap One Bank wanted government security in order to complete the loan package. Everyone of the people on the hook had 800+ credit scores, the business already had enough clients to turn a profit on the property within 30 days, and the land it was on was worth more than the clinic and was offered as security.

They wound up having to fund the property themselves because Cap One refused to complete the loan without 100% USDA security.

Meanwhile, college kids get credit cards with $5,000 limits and banks/credit card companies are making most of their money off over limit/late fees and over drafts.

[GreatSageCorban]

I'm someone who is now stuck w/an ARM, and a Heloc that adjusts. This is of course, back in 2004 when "new home values never drop! They never have! Live here, rather then an apartment, get up your credit score, pay some down, and use it to catapult you into a new home!" was kind of the thinking.

Luckily (for me) interest rates have been so low, that when the heloc and arm started adjusting, the rates went down. My goal now is to pay enough of the 'under water' home off, that I can move and get a fixed rate. Live and Learn.

[Karazee]

The bank is lending you money. They're taking a risk. They have to weigh the risk and figure out what the chances are that you will not repay them their money. If they feel that the risk is too much, they will not lend you money. You can have good credit but if you aren't making enough money to support an extra expense, you won't get the loan.

I have no problem with the banks lending money to fewer people if it means the opposite of what caused the economy to collapse in the first place.

[GreatSageCorban]

The bank is lending you money. They're taking a risk. They have to weigh the risk and figure out what the chances are that you will not repay them their money. If they feel that the risk is too much, they will not lend you money. You can have good credit but if you aren't making enough money to support an extra expense, you won't get the loan.

I have no problem with the banks lending money to fewer people if it means the opposite of what caused the economy to collapse in the first place.

So true. Banks looooove it when you pay off your credit card every month, and actually own your car(s). Makes for pretty debt to income.

What is it? 33% monthly debt to gross income is the line?

[Nah]

First of all, freecreditreport.com isn't free

I cringe at the TV ads for this website every time.

The only free credit report service I've found and used (aside from making a major purchase) is AnnualCreditReport.com.

[Tinykong]

So true. Banks looooove it when you pay off your credit card every month, and actually own your car(s). Makes for pretty debt to income.

What is it? 33% monthly debt to gross income is the line?

Lenders don't like people who pay off their debts every month, because they don't make interest off those people. They prefer people who have a "taste for credit" (their words, not mine) because they will live beyond their means and make interest payments forever.

[tombstoner139]

Credit companies are nothing more than financial parasites.
The entire system is geared for sucking you into debt and feeding on the interest for decades.
Never use a credit card. if you do make sure you pay it all off asap.
home and auto loans are different because the interest rates are so much lower then credit cards.
The value you get for housing and transportation is worth the interest. people missus what little extra money is left over
at the end of the month. i have a friend who budgets all his money for cred purchases. everything is for the credit card payment.
then once a little limit is created on the card, he uses it. its like he's deliberately ok with a 21% after tax pay cut. because that whats hes effectively living off of
god help him if hes late with a payment.

[Siduri]

I agree that credit scores are stupid, not only that, they are fckin pointless.

I have a flawless credit score of 999, I cannot get it any higher, but this does not make my life any easier.

I cannot get credit for anything of worth! I have direct debits (Phone/Internet/Gas/Electricity/Rent) , which I have never missed a payment on, hence the 999 credit score (along with registered polling address and long residency at the same address) but this doesn't help me one little bit. According to the bank, I have no record of paying back a sizable amount of credit so I am high risk.....ironically the only way to do this is to get a fckin credit card or loan, and its one giant circle from then on out!

I earn a decent amount of money, have been in full time employment with the same company for years and I have no where to turn! So big credit scores mean sweet fuck all, I'm screwed until banks unfuck their heads and stop giving money to pointless endeavors and high rolling bankers!

(Little rant over)

I had to chuckle at the 999 credit score. In my line of work, when a 999 score is passed to us from the Bureaus it is typically due to insufficient credit or an error and is not a legitimate score. Unless the Telecommunications and Utilities are being reported to the Bureaus then it doesn't matter if you pay within 30 days or not when looking solely at the credit report.

[ScottsdaleHokie]

I had to chuckle at the 999 credit score. In my line of work, when a 999 score is passed to us from the Bureaus it is typically due to insufficient credit or an error and is not a legitimate score. Unless the Telecommunications and Utilities are being reported to the Bureaus then it doesn't matter if you pay within 30 days or not when looking solely at the credit report.

Especially when considering 850 is the max score.

[FathomFear]

I mean my point is, I dont understand if I get it checked to let say open a credit card, Why in the hell of hell does it go down? Please tell me, I want a detailed post on WHY all my hard work and paying ontime and over paying on my house and my car payments does it GO DOWN? Then takes 4 months to get back up? I will give that a Stupid as Fuck tag.

To be clear, your credit score does not necessarily go down when you receive a "hard inquiry" by virtue of applying for a credit card. It will likely go down, though, if you receive a certain number of hard inquiries over a short amount of time. The reason for this is because the act of opening multiple accounts, etc, is seen as a potential risk. Opening lots of credit cards or accounts in a short window is a common precursor to going into debt.

Credit scores are entirely about risk mitigation. When you exist in an economy when defaulting and bankruptcy is so common, lenders need to be careful. If they weren't careful, they would lose even more money and thus become even less likely to loan money. And lack of confidence in loans tends to cripple the whole economic system.

[StayTuned]

Thousands of morons too stupid to first read and UNDERSTAND what they signed.

They're called adjustable rate loans. If you're so freaking stupid to sign your name to a contract without completely understanding the terms, then you deserve what's coming to you. And BTW, don't expect other people to bail you out of your own stupidity.

Because people have never betrayed each other.