5 ms·

>Citi gave me a credit card with a $3,000 limit as a college freshmen. How old are you? Just a few years ago, despite making a very decent amount of money and

>Citi gave me a credit card with a $3,000 limit as a college freshmen. How old are you? Just a few years ago, despite making a very decent amount of money and having no marks on my credit, it took an entire year for me to get a credit card. Reason: lack of credit history. A lot of people have similar stories. >This depends on your definitions a little bit. The part where you spend money that isn't yours and then pay it off later. That's debt. Personally, I've learned the game so to speak and now continually get out outrageously good offers for cars, credit cards, home loans, you name it. I have a about $90k~ worth of available credit to me on my CC's alone. But despite having an incorrect black mark for a medical bill that's reported by _ONE_ CRA (the others removed it after I gave them proof that the debt wasn't valid, Experian refuses to listen and because it got reviewed once they won't review it again), I get better offers now than I did when I had a squeaky clean record. It's an absurdly backwards system. Get debt to get more debt. Hope CRA's don't fuck anything up. Credit card management has no indication how I'll manage a loan (whether a house or car) due to the nature of spending and utilization, but financial institutions treat it as such. Quite frankly we need "stricter" credit laws across the board. 1. Start out with a "default" score at the very least. 2. Cap interest rates on CC's (20% APR is stupid). No reason a CC should have an interest rate of above 12%. 3. Don't allow medical debts to be displayed in pulls from CRA's. If the institution really wants to see "everything", make them pay a decently high fee for it. They must also explicitly state that in their loan consideration for you, they took into account medical debt. Craft laws around whether or not financial institutions should be able to consider these debts, depending on the loan being offered. 4. Prevent employers from pulling credit history. Your finances are not their business. 5. Prevent landlords from pulling credit history. They are not loaning you money. If they want to pull your credit history, then they need to also contribute to it positively (i.e. report payment history during the length of your lease, accurately).

chipperyman573 10y ago
>Prevent landlords from pulling credit history. Your finances are not their business. I disagree, if you have a terrible credit history, leasing to you may be very risky. They aren't loaning you money, but they are trusting that you will have the money every month to pay them with.
- sithadmin 10y ago
  >They aren't loaning you money, but they are trusting that you will have the money every month to pay them with. Even more importantly than that: the lessor gives the lessee custody and (limited) care-taking responsibilities over what, in most cases, represents a significant investment of capital.
  - hanoz 10y ago
    Far more importantly than that: the landlord, usually morgaged, is making a tenuous claim of ownership of the tenant's home. If the landlord does not keep up with his payments the tenant and his family face the prospect of disruption and upheaval of far greater import than any monentey shortfall the landlord might risk. Therefore the tenant has by far the greater claim to an assurance of the landlord's credit worthiness than vice versa.
  - doug1001 10y ago
    i agree. In fact, when i signed the lease, i handed over a check for first and last month's rent plus a security deposit equal to another month's rent. it's me, the tenant, who is loaning money to my landlord.
    - nommm-nommm 10y ago
      It cost a fortune to evict tenants who don't pay their rent.
- popmystack 10y ago
  Then they should be forced to positively report that you are agreeing to the terms of your lease. It shouldn't be a one way street. Right now, there is nothing for most land lords to really see on credit reports except for seriously cases of rental delinquency (evictions will show up, but these are outstandingly rare). You get dinged for them looking at what will largely be irrelevant information to your landlord. How I manage my credit cards has no correlation to how I've how honored my apartment leases. It makes no sense for someone to deny you a place to live because of other outstanding debts, often these debts do not even follow the same financial contracts or have the same importance in many people's lives.
scott00 10y ago
> How old are you? Just a few years ago, despite making a very decent amount of money and having no marks on my credit, it took an entire year for me to get a credit card. Reason: lack of credit history. A lot of people have similar stories. I don't really understand why, but it's way easier to get a credit card with no history if you are in college. People who would easily be approved as a senior in college will get denied 12 months later. It's stupid that it works this way, but some of the best financial advice you can give a college student is "get a credit card before you graduate." > 4. Prevent employers from pulling credit history. Your finances are not their business. This resonates intuitively with a lot of people (myself included), and is actually the law in 11 states. There are some interesting subtleties that should be considered before making up your mind though. In brief, the practical impact can make things _worse_ for some demographics often assumed to benefit from this type of legislation. A mass market article: https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-law-was-supposed-to-reduce-discrimination-but-it-made-hiring-more-racially-biased/ https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-l... The original research: http://scholar.harvard.edu/files/shoag/files/no_more_credit_score_employer_credit_check_bans_and_signal_sub.pdf?m=14483 http://scholar.harvard.edu/files/shoag/files/no_more_credit_... > 5. Prevent landlords from pulling credit history. They are not loaning you money. If all goes well, they aren't loaning you money. However, in most states it takes at least a couple of months to lawfully evict a non-paying tenant. So landlords are implicitly offering to loan tenants a few months rent.
makmanalp 10y ago
> Prevent landlords from pulling credit history. I never understood this - why is someone else asking for your credit history a ding on your credit report? It seems really silly to me, but I must be missing something.
- waqf 10y ago
  Because it's evidence that you're trying to take on more debt. Inquiries only affect your credit when they're from someone whom you've authorized to pull your credit as a potential creditor: https://www.nerdwallet.com/blog/finance/credit-report-soft-hard-pull-difference/ https://www.nerdwallet.com/blog/finance/credit-report-soft-h...
- superuser2 10y ago
  Each individual inquiry has a tiny effect. The point is that lots of inquiries indicate you are desperate for credit, and people who try to get a lot of credit at once are much more likely to default on it.
- nommm-nommm 10y ago
  The ding is so small you won't notice it until you start having 8+ inquiries.
yason 10y ago
I have a about $90k~ worth of available credit to me on my CC's alone. How many cards do you have? I understand it's mostly theoretical but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? Or any high-interest vehicle of debt for that much money, for that matter.
- popmystack 10y ago
  I didn't ask for them. I have 4 total. Two when I got when I was first starting out. I have two cards which comprise the bulk of my credit (one from American Express and the other Chase), which represent ~50% of that $90k. Both have credit limits around $20-25k. >but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? I don't know, but I'm sure as heck not going to utilize them that much! I am sure the credit issuers wish I did though.
- nommm-nommm 10y ago
  Credit cards may not be high interest as you may think. Depends. Some credit cards have promotional low or no interest rates for a year or so. You can then balance transfer to another promotional rate card at the end of the year. Also many issuers (Barclaycard, AMEX, Capital One) have low or no interest rates for active duty military.
- yaks_hairbrush 10y ago
  > why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? Here are a couple ideas: lawyer fees during a contested divorce and emergency spending from being out of work too long.
superuser2 10y ago
>Credit card management has no indication how I'll manage a loan (whether a house or car) due to the nature of spending and utilization I think the actuary-types who design the scoring models would disagree vehemently with this one. Scoring models are built from regressions on actual default rates.
- popmystack 10y ago
  Considering renting history is not accurately reported in any meaningful form, I don't know how they disagree with me. Most people probably aren't willing to give up their car, I'd figure those that have credit issues are still most likely making car payments. It's one thing to say "I see you've been late on a few of your car payments, so we're going to give a higher interest rate." and it's something else to say "You have a few unpaid medical bills/late CC payments so we're going to give you a higher interest rate on this car loan." I just have a hard time really believing that is the case. Often credit issuers simply look at the totality of everything, instead of appropriately looking the history of the specific financial contract they're wanting to issue.
  - mikeash 10y ago
    Accurately predicting your likelihood of default is worth a ton of money. If every company makes bad assumptions like you describe, then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise. That doesn't mean that systematic failures can't happen, but they're pretty unlikely. It's much more likely that you underestimate the correlation between these disparate defaults than that the banks overestimate it.
    - popmystack 10y ago
      > then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise. This quite literally happens already.
      - 10y ago

chipperyman573 10y ago

>Prevent landlords from pulling credit history. Your finances are not their business. I disagree, if you have a terrible credit history, leasing to you may be very risky. They aren't loaning you money, but they are trusting that you will have the money every month to pay them with.

sithadmin 10y ago
>They aren't loaning you money, but they are trusting that you will have the money every month to pay them with. Even more importantly than that: the lessor gives the lessee custody and (limited) care-taking responsibilities over what, in most cases, represents a significant investment of capital.
- hanoz 10y ago
  Far more importantly than that: the landlord, usually morgaged, is making a tenuous claim of ownership of the tenant's home. If the landlord does not keep up with his payments the tenant and his family face the prospect of disruption and upheaval of far greater import than any monentey shortfall the landlord might risk. Therefore the tenant has by far the greater claim to an assurance of the landlord's credit worthiness than vice versa.
- doug1001 10y ago
  i agree. In fact, when i signed the lease, i handed over a check for first and last month's rent plus a security deposit equal to another month's rent. it's me, the tenant, who is loaning money to my landlord.
  - nommm-nommm 10y ago
    It cost a fortune to evict tenants who don't pay their rent.
popmystack 10y ago
Then they should be forced to positively report that you are agreeing to the terms of your lease. It shouldn't be a one way street. Right now, there is nothing for most land lords to really see on credit reports except for seriously cases of rental delinquency (evictions will show up, but these are outstandingly rare). You get dinged for them looking at what will largely be irrelevant information to your landlord. How I manage my credit cards has no correlation to how I've how honored my apartment leases. It makes no sense for someone to deny you a place to live because of other outstanding debts, often these debts do not even follow the same financial contracts or have the same importance in many people's lives.

scott00 10y ago

> How old are you? Just a few years ago, despite making a very decent amount of money and having no marks on my credit, it took an entire year for me to get a credit card. Reason: lack of credit history. A lot of people have similar stories. I don't really understand why, but it's way easier to get a credit card with no history if you are in college. People who would easily be approved as a senior in college will get denied 12 months later. It's stupid that it works this way, but some of the best financial advice you can give a college student is "get a credit card before you graduate." > 4. Prevent employers from pulling credit history. Your finances are not their business. This resonates intuitively with a lot of people (myself included), and is actually the law in 11 states. There are some interesting subtleties that should be considered before making up your mind though. In brief, the practical impact can make things _worse_ for some demographics often assumed to benefit from this type of legislation. A mass market article: https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-law-was-supposed-to-reduce-discrimination-but-it-made-hiring-more-racially-biased/ https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-l... The original research: http://scholar.harvard.edu/files/shoag/files/no_more_credit_score_employer_credit_check_bans_and_signal_sub.pdf?m=14483 http://scholar.harvard.edu/files/shoag/files/no_more_credit_... > 5. Prevent landlords from pulling credit history. They are not loaning you money. If all goes well, they aren't loaning you money. However, in most states it takes at least a couple of months to lawfully evict a non-paying tenant. So landlords are implicitly offering to loan tenants a few months rent.

makmanalp 10y ago

> Prevent landlords from pulling credit history. I never understood this - why is someone else asking for your credit history a ding on your credit report? It seems really silly to me, but I must be missing something.

waqf 10y ago
Because it's evidence that you're trying to take on more debt. Inquiries only affect your credit when they're from someone whom you've authorized to pull your credit as a potential creditor: https://www.nerdwallet.com/blog/finance/credit-report-soft-hard-pull-difference/ https://www.nerdwallet.com/blog/finance/credit-report-soft-h...
superuser2 10y ago
Each individual inquiry has a tiny effect. The point is that lots of inquiries indicate you are desperate for credit, and people who try to get a lot of credit at once are much more likely to default on it.
nommm-nommm 10y ago
The ding is so small you won't notice it until you start having 8+ inquiries.

yason 10y ago

I have a about $90k~ worth of available credit to me on my CC's alone. How many cards do you have? I understand it's mostly theoretical but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? Or any high-interest vehicle of debt for that much money, for that matter.

popmystack 10y ago
I didn't ask for them. I have 4 total. Two when I got when I was first starting out. I have two cards which comprise the bulk of my credit (one from American Express and the other Chase), which represent ~50% of that $90k. Both have credit limits around $20-25k. >but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? I don't know, but I'm sure as heck not going to utilize them that much! I am sure the credit issuers wish I did though.
nommm-nommm 10y ago
Credit cards may not be high interest as you may think. Depends. Some credit cards have promotional low or no interest rates for a year or so. You can then balance transfer to another promotional rate card at the end of the year. Also many issuers (Barclaycard, AMEX, Capital One) have low or no interest rates for active duty military.
yaks_hairbrush 10y ago
> why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? Here are a couple ideas: lawyer fees during a contested divorce and emergency spending from being out of work too long.

superuser2 10y ago

>Credit card management has no indication how I'll manage a loan (whether a house or car) due to the nature of spending and utilization I think the actuary-types who design the scoring models would disagree vehemently with this one. Scoring models are built from regressions on actual default rates.

popmystack 10y ago
Considering renting history is not accurately reported in any meaningful form, I don't know how they disagree with me. Most people probably aren't willing to give up their car, I'd figure those that have credit issues are still most likely making car payments. It's one thing to say "I see you've been late on a few of your car payments, so we're going to give a higher interest rate." and it's something else to say "You have a few unpaid medical bills/late CC payments so we're going to give you a higher interest rate on this car loan." I just have a hard time really believing that is the case. Often credit issuers simply look at the totality of everything, instead of appropriately looking the history of the specific financial contract they're wanting to issue.
- mikeash 10y ago
  Accurately predicting your likelihood of default is worth a ton of money. If every company makes bad assumptions like you describe, then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise. That doesn't mean that systematic failures can't happen, but they're pretty unlikely. It's much more likely that you underestimate the correlation between these disparate defaults than that the banks overestimate it.
  - popmystack 10y ago
    > then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise. This quite literally happens already.
    - 10y ago