Credit score system, unfair and way too strict (responsible, get, year)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Very few people are in the 400s, so you could almost consider the minimum score 500. The average score in the US is about 670+. The average score here in MN is 707! Anything over 700 is pretty much considered excellent, so our run of the mill average Joe has excellent credit.
BTW, how the heck does someone get a credit score in the 400s? (And are there any real-life 350-399 scores?) I thought my credit was atrocious at one point - no income (no ability to pay), a bunch of charged off accounts, a judgment and a tax lien - and I was just over 500. Even weirder was that my three scores were approx 50 points apart: 505, 554, 620.
I think it's unfair. My credit is wrecked and the only thing I have on it (except for two credit cards...which have low limits, but are always current) are my student loans. I've had them since age...oh, 19, so I've never been approved for anything.
Low limit credit cards can kill your credit score.
With a low limit, unless you don't use it at all (which doesn't much help your credit score), you are ALWAYS using a "high percentage of available credit". This high ratio of credit utilization kills your credit score.
I look at hundreds and hundreds and see maybe 5% with a medical ding. Also, if the rest of your credit is good and there are a couple of medical collections, they won't have that great of impact on your score.
People can have medically related bad credit without a direct medical ding. I had a health collapse which led to a long hospitalization and a year unable to work. During my time without income all my open accounts were charged off and these accounts get sold and re-aged. I consider that a medical credit problem without a direct medical ding.
The main problem I have with the current system (after trying to clean up my credit), is that you are penalized for paying back old debt.
I had a collection from a credit card I stupidly didn't pay when I was younger. I paid it off recently. My credit score DROPPED because of this, and apparently, the collection account causes just as much harm to my score whether it's listed as PAID or UNPAID.
Obviously if you repay old debt, you become less creditworthy and more of a risk.
Your score went down because your payment history showed that you were a higher risk for non-payment than most other consumers. You mismanaged your credit and that is what your credit score reflected.
So if you ignore it and wait seven years, it goes away and suddenly you're a lower risk???
Certainly you don't think that seeking credit couseling (bad way to go by the way) and paying off less than you owe should not hurt your credit rating do you??
Better to just ignore debts, wait seven years for them to go away, and poof you're now magically a lower risk???
Oh geez, not again. You can get color TVs for under $50. Heck, I've been offered old color TVs for free by friends when they buy HD and/or big screens. In most parts of the country today, people really do need a car to get to and from work, especially if they have more than one job. Many poor people have prepaid cell phones (I do, costs about $7-$10 per month) and no landline. Microwaves and air conditioning are standard furnishings in most rentals today.
IF YOU HAVE FOOD, SHELTER, AND CLOTHING YOU ARE NOT POOR!
I've been to multiple countries and I have seen the "poor". They are in the streets dying from hunger and the cold.
Get over yourself, quit your crying, and be thankful you live in a nation that does NOT allow people to be "poor".
This post was removed because I failed to provide the original link. So here is the post again with the link included:
It's completely unfair...check this out. This is a quote from Epic.org. "Inaccuracies in Credit Reports
Since credit scores are so important, it is imperative that the scores be based on accurate information. However, inaccuracy problems continue to hurt individuals' credit scores. An extensive study conducted by the National Credit Reporting Agency and the Consumer Federal of America revealed that 29 percent of individuals had significant errors in their credit report that translated into a 50-point or more error in their credit score. CRAs receive a vast amount of complaints, and they do not devote adequate resources to property address complaints. Representatives at Experian, for example, are required to address 100 complaint calls per day.
Furthermore, CRAs are more concerned with amassing a large quantity of information about an individual because this is what the subscribers demand. This practice compromises data quality because when retrieving information about an individual, CRA algorithms are designed to discard minor differences that occur in identifiers, such as incorrect digits in a social security number. For example, in a case against Trans Union, the CRA regularly mixed the files of Judy Thomas with Judith Upton. These files were mixed because of the similarities in first names (CRAs tend to link women by their first names to track them if they change their names in marriage), and because their Social Security Numbers were very similar. The presumption here is that it is better to gather more information and err on the side of inclusion then to risk excluding bad credit information about an individual. The potential resulting problem is a mixed file, where CRAs combine information from different individuals into one file.
Credit report inaccuracies also come from information suppliers. In 1999, several banks admitted to withholding positive information about individuals so that their customers would not be lured away by competitors offering better credit terms. A 1999 Office of the Comptroller of the Current press release reads: "Some lenders appear to have stopped reporting information about subprime borrowers to protect against their best customers being picked off by competitors."
Individuals with inaccurate credit reports will in turn have inaccurate credit scores. They are denied credit, or charged higher interest rates, at no fault of their own."
Not to be argumentative, but the mother and baby look rather healthy in that picture. It's rather unfair to throw that out there when we are discussing credit scores, not famine. It's not that it's whining so much as trying to create a healthy debate on why the credit companies are using your scores against you. The truth of the matter is, they WANT you to have crappy credit so they can charge you more. It's in their best interest....so they cost you thousands of dollars more than need be, because you're a "risk". Your mortgage company would LOVE for your credit score to be 50 points lower. That's an extra percentage rate. I really don't need to get into what that would ultimately cost you, you can figure that out on any mortgage calculator.
Now if "whining" about our finances is in bad taste, maybe we should all just shut up and play nice....
Or...maybe if we had that extra money to send overseas instead of putting it in the pockets of greedy credit companies, things would be better all the way around.
Another solution is to stop getting credit altogether. Of course that wouldn't do much for the mortgage crises would it? I bet we'd have more "whiners" if the entire economy collapsed because no one could afford credit any longer. Much less health care.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
