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Old 01-11-2018, 07:41 PM
 
Location: Omaha, Nebraska
6,306 posts, read 3,479,933 times
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Quote:
Originally Posted by hitpausebutton2 View Post
We assume that even the rich pays their bills as well..
No one is assuming that. Didn't you understand Mathjak's point? To have a high credit rating, a person has to have demonstrated both the MEANS to repay and the WILLINGNESS to repay. Just having a lot of money in the bank doesn't give a person a high credit rating. To get a high credit rating, the person needs to have a long history of borrowing money and paying it back on time.

There are plenty of wealthy people who have lousy credit because they DON"T pay their bills on time, even though they can well afford to do so. And many people of modest means do have excellent credit ratings because they do pay what they owe and they don't borrow more than they can afford to repay.

 
Old 01-11-2018, 08:14 PM
 
Location: NJ
22,680 posts, read 28,568,174 times
Reputation: 14619
Quote:
Originally Posted by hitpausebutton2 View Post
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?
you should start lending money to people with low credit scores and offer them low interest rates. good luck.
 
Old 01-11-2018, 08:26 PM
 
Location: Omaha, Nebraska
6,306 posts, read 3,479,933 times
Reputation: 14967
Quote:
Originally Posted by hitpausebutton2 View Post
Their needs to be some limits on max a company is willing to charge without screwing the person.
Many states did once have usury laws, which capped the amount of interest that could be charged on a loan. That didn’t mean people with poor credit scores paid less interest on their loans, though; it meant they couldn’t get a loan at all.

Maybe those folks were better off when they had no access to credit. At least they couldn’t dig themselves into a debt hole they’d never be able to get out of, like they can now. But I’m not sure I would be willing to make that argument. As long as the person truly understands the terms of the loan and the lender is willing to make the loan, it seems pretty paternalistic to say “No, you can’t do that.”
 
Old 01-11-2018, 08:33 PM
 
12,404 posts, read 9,203,248 times
Reputation: 8863
Quote:
Originally Posted by hitpausebutton2 View Post
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?
There is a middle ground between absolutely flat interest rates on the one hand and shark loans on the other...
 
Old 01-12-2018, 05:00 AM
 
64,629 posts, read 66,129,695 times
Reputation: 43046
there are honesty issues too with a low score group . the auto insurance industry had to prove a link to congress which they did .

so while you personally may be honest you are judged as a group by association . that is why jobs check too .

no one wants to play detective to see if you are in the dis-honest or honest group .
 
Old 01-12-2018, 05:23 AM
 
437 posts, read 198,738 times
Reputation: 449
Quote:
Originally Posted by hitpausebutton2 View Post
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?
One could argue that the lender should not have a cap on what interest they charge to a buyer. It is the lender that has gotten “screwed”, as you put it. He/she lent money to the buyer ( who broke a promise to pay the lender) and now the lender is the injured party. Yet here you are suggesting this lender should take on a further burden of taking a lower rate, making it harder to cover future defaults, let alone getting a profit in return for putting their capital at risk.

If you cannot afford the payments, you shouldn’t buy the item you are trying to purchase. Further yet, you should be paying cash until you are more financially stable.
 
Old 01-12-2018, 01:44 PM
 
Location: Anchorage
760 posts, read 1,422,103 times
Reputation: 724
Quote:
Originally Posted by hitpausebutton2 View Post
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?
Hhmmm... the lending party is not in the business of "helping" a borrower, their objective is to make money.
It is not "putting someone down based on their score", it's charging extra for extra risk - just like everybody already had said! That way, if somebody does default (and some people inevitably will), bank can still recoup money from others. Otherwise, there would be NO NEED for a credit score... as well as NO INCENTIVE whatsoever to pay on time, etc. - if everybody got the same rates.

When I first started building my credit, YOU BET I preferred to have higher rates vs. NO loan, at all!
Which very well might have been the case, if lenders are only allowed to charge a flat fee and would flat-out deny any credit to people with low scores (which, let's not forget, also include those that simply don't have enough credit history - and would never get a chance to start one, if no one is willing to risk!)

Quote:
Originally Posted by hitpausebutton2 View Post
Their needs to be some limits on max a company is willing to charge without screwing the person.
I believe there is, I haven't heard about rates above 25-29%
 
Old 01-12-2018, 03:05 PM
 
2,360 posts, read 1,028,642 times
Reputation: 2071
Quote:
Originally Posted by HappyNewMe View Post
Hhmmm... the lending party is not in the business of "helping" a borrower, their objective is to make money.
It is not "putting someone down based on their score", it's charging extra for extra risk - just like everybody already had said! That way, if somebody does default (and some people inevitably will), bank can still recoup money from others. Otherwise, there would be NO NEED for a credit score... as well as NO INCENTIVE whatsoever to pay on time, etc. - if everybody got the same rates.

When I first started building my credit, YOU BET I preferred to have higher rates vs. NO loan, at all!
Which very well might have been the case, if lenders are only allowed to charge a flat fee and would flat-out deny any credit to people with low scores (which, let's not forget, also include those that simply don't have enough credit history - and would never get a chance to start one, if no one is willing to risk!)

I believe there is, I haven't heard about rates above 25-29%
Pay day loans.. and im sure some buy here pay here places.. Honestly my first car was from car-mart because no dealership would take me at the time. Had zero credit at the time, so no history. That is what i still face from time to time. I pay things off quickly as possible instead of letting it settle on my report. That shouldnt be a big hit but it is. Car-mart charge me %8 at the time, so it was brutal for 2 years, but paid it off and trade in at the dealership finally. From their own been trading in and out for 10 years.. But history what your paying on should not be a factor, and it hurts your score alot!! So because i pay things off quickly, i get punished? because im not paying your high interest?
 
Old 01-12-2018, 03:41 PM
 
64,629 posts, read 66,129,695 times
Reputation: 43046
i charge everything i can and pay it off even before it is due . it has only had positive effects on my credit score which is well in the 800''s.

today you are judged by your credit for so many things . everything from renting an apartment , what you pay for insurance to getting a job is how you may be judged by those who don't know you , nor care to know you .

like it or not that is just how it is . you can create a good score for yourself or choose not to and face the consequences when they happen . your choice.

arguing here is irrelevant .
 
Old 01-12-2018, 03:46 PM
 
Location: Denver CO
19,005 posts, read 10,047,592 times
Reputation: 27775
Quote:
Originally Posted by hitpausebutton2 View Post
Pay day loans.. and im sure some buy here pay here places.. Honestly my first car was from car-mart because no dealership would take me at the time. Had zero credit at the time, so no history. That is what i still face from time to time. I pay things off quickly as possible instead of letting it settle on my report. That shouldnt be a big hit but it is. Car-mart charge me %8 at the time, so it was brutal for 2 years, but paid it off and trade in at the dealership finally. From their own been trading in and out for 10 years.. But history what your paying on should not be a factor, and it hurts your score alot!! So because i pay things off quickly, i get punished? because im not paying your high interest?
No, you do not get penalized for paying off your debts. Having a good track record of paying them off is what increases your credit score. Not paying is what decreases it, and what makes a lender question whether you are a good risk or not.

A certain percent of people don't pay off the money they borrow - and more people with a history of not paying it in the past are likely to do the same in the future compared with those who have a long track record of always paying off their debt. Lenders charge more interest to the group with the bad history because the reality is that some of them will default on what they owe, and the higher interest rate makes up for those losses.
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