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The FICO business is highly questionable and to a degree an over exaggerated value to retail business that has evolved into a standard or scale that often is bogus and doesn't permit umpiring. Could FICO regulation be a security risk to our economy ? Look at the pathetic mindset of auto dealer financial institutions. often exacerbating marginal investors in a car/truck purchase with obsurd interested rates (part of an effort to profit having zero to do with the FICO but rather leveraging off of clueless schmucks who forgot to pay the electric in 2011!). This scam reduces the sales of cars,trucks,cycles and RV's costing the economy billions . How these auto sales folks tolerate this ridiculous near criminal bunch of handicapping obstaclee is inconprehensible and virtually insane.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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It's all they have, and it works. It does not reduce car sales, it provides more interest to the lender in compensation for the increased risk associated with a lower credit score. Most electric providers do not report to FICO, but a "*******" who forgets to pay any bill is almost always going to get a reminder before it is late enough to affect their score.
To use the OP's own terminology, this thread is..."obsurd".
And, if the OP is concerned with "interested rates", I can tell him that I am not interested in this non-issue.
Credit scores are meaningless when you pay cash. It's really simple, walk into a dealership, put a deposit down on the car and get a cashier's check from the bank. Title shows up two weeks later .
FICO ain't perfect, and can be manipulated to some degree...but, as others noted, it is really the peg that any institution has as a qualifier, be it car loan, home mort, personal loan, et al.
Don't see in the lit or stats where 'car/truck sales' are less than they could be due to FICO.
The loan biz is a dlr gross margin center, (like warranty and post warranty service work), and the used car lot guys 'live off of' the loan biz, often factored out to a third party.
Not sure the OP's point is valid, and the OP's understanding of FICO, car sales, interest rates charged, etc, may be limited.
GL, mD
Nothing's perfect. Overall though, it's great. It increases auto sales since lenders are much more willing to lend having a quick tool for judging credit risk and most people can't afford to pay cash. For those of us who make a habit of paying what we owe, it means access to cheap credit which is again great. Most of my assets are in retirement accounts although I have a little outside. I'd have to handle things differently to pay cash without withdrawal fees and paying taxes on them. Borrowing is much cleaner. I don't have to plan ahead for 2-3 years to save up outside retirement funds. I just borrow at 0%.
Nothing's perfect. Overall though, it's great. It increases auto sales since lenders are much more willing to lend having a quick tool for judging credit risk and most people can't afford to pay cash. For those of us who make a habit of paying what we owe, it means access to cheap credit which is again great. Most of my assets are in retirement accounts although I have a little outside. I'd have to handle things differently to pay cash without withdrawal fees and paying taxes on them. Borrowing is much cleaner. I don't have to plan ahead for 2-3 years to save up outside retirement funds. I just borrow at 0%.
Precisely.
One thing I am figuring is that when my CD is up at year's end, I'm going to break it up into pieces and stagger them so I can borrow from them (if need be when on work downtime) as they expire one after the other and reload as necessary. My truck is at 1.74% interest. I can make that/those CD(s) work for me for a better rate.
When you can borrow money for dirt cheap, you have the option to do better things with your money than (see below):
Quote:
Originally Posted by wheelsup
pay cash.
OP probably won't complain when the gubmint gets around to ensuring easier borrowing by strongly frowning down on lenders considering bad credit history and late payments when making lending decisions. So...there's that.
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