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Old 01-11-2018, 02:50 PM
 
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Quote:
Originally Posted by CaptainNJ View Post
your score basically represents your history of paying back debt and your ability to pay back debt. so if you have a low score, there is a good chance the creditor wont get paid back. if you had one flat rate, then lenders would just have no choice but to deny credit to people with low scores.

Correct, but then we get in the issue of how can they get credit when nobody willing to do so? But still doesnt mean a jack up interest rate.. Flat rate still grants you a return in your investment right?

 
Old 01-11-2018, 02:51 PM
 
Location: NJ
22,743 posts, read 28,605,773 times
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Quote:
Originally Posted by hitpausebutton2 View Post
So why not charge them a higher rate on interest since they have the ability to pay it back. So you bank on higher risk folks vs not making any interest on "good score"?
im guessing that you are suggesting some kind of across the board legal mandate. in that case, if you charge me more for my good credit score; expect me to find a way to lower my credit score. why would i maintain good credit if there is a penalty for it?
 
Old 01-11-2018, 02:52 PM
 
Location: NJ
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Quote:
Originally Posted by hitpausebutton2 View Post
Flat rate still grants you a return in your investment right?
not if the borrower stops making his payments.
 
Old 01-11-2018, 03:08 PM
 
Location: Omaha, Nebraska
6,316 posts, read 3,493,450 times
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Quote:
Originally Posted by hitpausebutton2 View Post
Correct, but then we get in the issue of how can they get credit when nobody willing to do so?
Why should they get credit? There's no right to have other people loan someone money regardless of how that person behaves. It's up to the borrower to exhibit behavior that makes lenders willing to make a loan.

If a lender is going to take a higher risk, he'll understandably want a higher reward for assuming that risk. Otherwise he'll just take the sensible route of not loaning money to borrowers who have shown they're less likely to repay what they owe.
 
Old 01-11-2018, 04:03 PM
 
12,404 posts, read 9,218,311 times
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Quote:
Originally Posted by hitpausebutton2 View Post
So seems were all judge by a score system and the interest rate is base on that. With that being said, what is the purpose of jacking up a interest rate on somebody vs just having a flat bottom rate for everybody? Pro and con..
If the interest rate were flat, why would a lender lend to anyone other than the absolute safest borrower (the multimillionaires with lots of property)?

Also, what would prevent people who lack integrity from simply borrowing money with the intention of not paying it back, and then repeating? The judicial system can only handle so many of these each year!
 
Old 01-11-2018, 04:05 PM
 
64,756 posts, read 66,247,630 times
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Quote:
Originally Posted by hitpausebutton2 View Post
So why not charge them a higher rate on interest since they have the ability to pay it back. So you bank on higher risk folks vs not making any interest on "good score"?

the ability to pay the money back is only part of the requirement .demonstrating a want to pay it back is the other .

the two parts together are what is considered when someone wants to borrow money or wants you to entrust them with your property .

low credit score individuals have already demonstrated they failed at one or the other or possibly both . therefore they are higher risk .

they may not get any lender wiling to give them a loan and if they do that lender wants more for taking the risk with someone already known to have not lived up to their end of the bargain .

in most states your auto insurer will charge you more too .

this is a silly discussion .
 
Old 01-11-2018, 04:06 PM
 
12,404 posts, read 9,218,311 times
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Quote:
Originally Posted by hitpausebutton2 View Post
Correct, but then we get in the issue of how can they get credit when nobody willing to do so? But still doesnt mean a jack up interest rate.. Flat rate still grants you a return in your investment right?
You are assuming everybody will pay their bills, even those who have a history of not paying their bills!
 
Old 01-11-2018, 04:09 PM
 
64,756 posts, read 66,247,630 times
Reputation: 43142
it is a nonsensical discussion .
 
Old 01-11-2018, 06:08 PM
 
2,360 posts, read 1,033,035 times
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Quote:
Originally Posted by mathjak107 View Post
it is a nonsensical discussion .
then move on..


nuff said.



Just a open discussion as we have many things with interest all over the place.
 
Old 01-11-2018, 06:25 PM
 
2,360 posts, read 1,033,035 times
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Quote:
Originally Posted by ncole1 View Post
You are assuming everybody will pay their bills, even those who have a history of not paying their bills!
We assume that even the rich pays their bills as well.. We all make mistakes and live with them. Putting somebody down base on their score and over pricing them on the objective is really helping them? Their needs to be some limits on max a company is willing to charge without screwing the person. I might can see you charging extra 100 bucks a month say on a car note but not 300+ or even offer them 600$ a month car note, knowing they will default it. Say on the low end of a note, the best person gets it for $100 a month, middle person maybe $150 and your worst end should be $200.. not $200+ as it open you up for a default note?
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