5 ms·

Well, is it fair to say that the credit system in the US is fued up? Oligopoly of 3 agencies have pretty much entire control of your fate. Yes Fate. Purchasing

by 3327 13y ago

Well, is it fair to say that the credit system in the US is fued up? Oligopoly of 3 agencies have pretty much entire control of your fate. Yes Fate. Purchasing power means cash and since credit = cash these companies control the cash that you have at disposal. Which means your FATE. Its insanely difficult to pierce oligopolistic structures and Cartels because of obvious reasons. But some day some startup needs to tackle this. The system works for most but doesn't work for many.

deleted 13y ago
[deleted]
callmeed 13y ago
Yes absolutely. I currently cannot buy a house despite having a six-figure income for 4 years, money in savings, and having no debt save my student loan. All because of bad decisions I made in years past.
- dangrossman 13y ago
  Actual bad decisions you made in the past are a valid reason not to risk underwriting a large loan to you. There are valid criticisms of the credit agencies, but that doesn't seem like one of them. If you want a mortgage and you feel you have a convincing reason a bank should risk entrusting you with their money despite a bad credit history, try an in-person appointment with a lender at a local credit union. Be prepared to show your bank statements, several years of tax returns, and if you're self-employed, a signed letter from your business's accountant about the health of your cash flow. You'll definitely need enough cash on hand for a downpayment of at least 30% the house's value; good strategy even if it weren't required. If you really want to look credit-worthy, use that six figure income to pay off those student loans before you take on an even larger debt obligation.
  - callmeed 13y ago
    I don't disagree with you–but it can be frustrating to know you've improved both your responsibility and your earning power yet only be judged by the past. For example, I've paid cash for the last 5 cars our family has purchased over the last 6 years. Why doesn't my ability to do that apply to my credit-worthiness? Small things like that annoy me about the agencies/system. Also, the median home price where we live is $500-600K (depending on the city/neighborhood). 30% of that is quite a down-payment.
    - dangrossman 13y ago
      > Also, the median home price where we live is $500-600K (depending on the city/neighborhood). 30% of that is quite a down-payment. You're talking about being entrusted with half a million dollars of someone else's money. That's a huge bet to make on you; it goes both ways. If you can't afford the down payment, then you can't afford to live in that neighborhood. 30% isn't an unusual downpayment, especially if you don't have perfect credit. With a smaller downpayment, the bank is in a position where you could default on the mortgage, they repossess the house, and because it's depreciated in value at all, get less money when they sell it than they paid the person who sold the house to "you" (to the bank, really) after foreclosure and closing costs.
      - johnchristopher 13y ago
        Why is the house "depreciated in value at all" ? I don't understand that part.
        dangrossman 13y ago
        You just lived through a recession in which tens of millions of homes depreciated in value during the terms of their loans. Depreciated means it lost value; the house is worth less than before. That, combined with a small downpayment, can result in a bank holding a foreclosed home which is worth less than the value of the mortgage on it.
        johnchristopher 13y ago
        Ah, I see. I thought your explanation was more general, not specific to the current economic situation. And since I learned as a kid that a house normally only get more value over time (I live in western europe) that was confusing me. Thanks for the clarification.
        jdbernard 13y ago
        > I learned as a kid that a house normally only get more value over time I think this is one of the reasons we got into this mess. People bought more house than they could afford thinking they would be able to sell it if they needed to and at least break even. Nobody was prepared for underwater mortgages because we all assumed houses only appreciate.
- malandrew 13y ago
  I thought credit rating things only lasted 7 years. Are your credit transgressions more recent than that?
  - marincounty 13y ago
    I'm pretty sure it's 7 years. After that they're suspose to remove the information. They don't really care though. You need to call and have it removed. Sometimes you need to really hassel them. If you have old debt, some buyers of that old debt are fraudlently trying to make it look like new debt by filing it with credit agencies--fight it. It's all about statue of limitations. Oh, I've noticed some of you are very protective of our credit system. I've always felt most credit cards are very unfair. No real control over your rate of interest has alwalys bothered me. While, I'm on a rant. The Credit Agencies need some competition? It would be a great start up? A credit agency that actually looks at an individuals ability to pay back a loan. It shouldn't be a crime to pay off your bills without using a credit card. Oh yes, they claim to look at utility bills, etc, but in order to get the really good credit terms they want to see you used high interest credit cards through out your life. I'll never forget the look on my fathers face when he was refused a credit card, because he never saw the need to use credit until he was in his 60's. This was after paying off a morgage.
    - pionar 13y ago
      > A credit agency that actually looks at an individuals ability to pay back a loan. The problem with that is that just because someone is able to pay back a loan doesn't mean they will. I had a roommate in college that financially was able to pay off a credit card, but was just so irresponsible that he ignored it.
  - callmeed 13y ago
    Most are, but (from what I understand) there are ways items can stay on for longer. For example, if your account is sold or resold to a collection agency, I believe the clock resets under the new creditor.
    - 13y ago

by 3327 13y ago

deleted 13y ago

[deleted]

callmeed 13y ago

Yes absolutely. I currently cannot buy a house despite having a six-figure income for 4 years, money in savings, and having no debt save my student loan. All because of bad decisions I made in years past.

dangrossman 13y ago
Actual bad decisions you made in the past are a valid reason not to risk underwriting a large loan to you. There are valid criticisms of the credit agencies, but that doesn't seem like one of them. If you want a mortgage and you feel you have a convincing reason a bank should risk entrusting you with their money despite a bad credit history, try an in-person appointment with a lender at a local credit union. Be prepared to show your bank statements, several years of tax returns, and if you're self-employed, a signed letter from your business's accountant about the health of your cash flow. You'll definitely need enough cash on hand for a downpayment of at least 30% the house's value; good strategy even if it weren't required. If you really want to look credit-worthy, use that six figure income to pay off those student loans before you take on an even larger debt obligation.
- callmeed 13y ago
  I don't disagree with you–but it can be frustrating to know you've improved both your responsibility and your earning power yet only be judged by the past. For example, I've paid cash for the last 5 cars our family has purchased over the last 6 years. Why doesn't my ability to do that apply to my credit-worthiness? Small things like that annoy me about the agencies/system. Also, the median home price where we live is $500-600K (depending on the city/neighborhood). 30% of that is quite a down-payment.
  - dangrossman 13y ago
    > Also, the median home price where we live is $500-600K (depending on the city/neighborhood). 30% of that is quite a down-payment. You're talking about being entrusted with half a million dollars of someone else's money. That's a huge bet to make on you; it goes both ways. If you can't afford the down payment, then you can't afford to live in that neighborhood. 30% isn't an unusual downpayment, especially if you don't have perfect credit. With a smaller downpayment, the bank is in a position where you could default on the mortgage, they repossess the house, and because it's depreciated in value at all, get less money when they sell it than they paid the person who sold the house to "you" (to the bank, really) after foreclosure and closing costs.
    - johnchristopher 13y ago
      Why is the house "depreciated in value at all" ? I don't understand that part.
      - dangrossman 13y ago
        You just lived through a recession in which tens of millions of homes depreciated in value during the terms of their loans. Depreciated means it lost value; the house is worth less than before. That, combined with a small downpayment, can result in a bank holding a foreclosed home which is worth less than the value of the mortgage on it.
        johnchristopher 13y ago
        Ah, I see. I thought your explanation was more general, not specific to the current economic situation. And since I learned as a kid that a house normally only get more value over time (I live in western europe) that was confusing me. Thanks for the clarification.
        jdbernard 13y ago
        > I learned as a kid that a house normally only get more value over time I think this is one of the reasons we got into this mess. People bought more house than they could afford thinking they would be able to sell it if they needed to and at least break even. Nobody was prepared for underwater mortgages because we all assumed houses only appreciate.
malandrew 13y ago
I thought credit rating things only lasted 7 years. Are your credit transgressions more recent than that?
- marincounty 13y ago
  I'm pretty sure it's 7 years. After that they're suspose to remove the information. They don't really care though. You need to call and have it removed. Sometimes you need to really hassel them. If you have old debt, some buyers of that old debt are fraudlently trying to make it look like new debt by filing it with credit agencies--fight it. It's all about statue of limitations. Oh, I've noticed some of you are very protective of our credit system. I've always felt most credit cards are very unfair. No real control over your rate of interest has alwalys bothered me. While, I'm on a rant. The Credit Agencies need some competition? It would be a great start up? A credit agency that actually looks at an individuals ability to pay back a loan. It shouldn't be a crime to pay off your bills without using a credit card. Oh yes, they claim to look at utility bills, etc, but in order to get the really good credit terms they want to see you used high interest credit cards through out your life. I'll never forget the look on my fathers face when he was refused a credit card, because he never saw the need to use credit until he was in his 60's. This was after paying off a morgage.
  - pionar 13y ago
    > A credit agency that actually looks at an individuals ability to pay back a loan. The problem with that is that just because someone is able to pay back a loan doesn't mean they will. I had a roommate in college that financially was able to pay off a credit card, but was just so irresponsible that he ignored it.
- callmeed 13y ago
  Most are, but (from what I understand) there are ways items can stay on for longer. For example, if your account is sold or resold to a collection agency, I believe the clock resets under the new creditor.
  - 13y ago