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Should a person with 8 speeding tickets pay the same as someone who hasn't had a ticket in 20 years? Which driver poses more risk to the insurer? That's why they pay more. The risk of a accident and/or claim is higher.
Loans are the same. A person with a low score has demonstrated that they cannot pay back loans or they have no history at all. Both cases show that this group is more risky and more likely to default on the loan than someone with a 700+ credit score that has never even so much as had a late payment. If you can't see why ignoring risk in lending is bad look no further than the government subsidized student loan crisis where it is required to loan people money at fixed rates no matter what type of education they persue.
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, paying off loans early doesn't hurt your credit score. If your score has gone down, something else is the cause. (And if you examine your credit reports, you may be able to discover what that "something else" is and get it fixed.)
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..
Because Cash is a commodity, and like all commodities, the price of Cash -- the interest rate -- is determined by Supply & Demand, then modified by factors such as risk.
and risk takes in many factors . the ability to pay --the want to pay --- perhaps your age , married or not married , own or rent , some honesty factor , etc etc , the list goes on and on .
No, paying off loans early doesn't hurt your credit score. If your score has gone down, something else is the cause. (And if you examine your credit reports, you may be able to discover what that "something else" is and get it fixed.)
I have and yes it does hurt. According to 2 credit counclers and 2 bank loan officers that look at my reports.
Biggest hurt is history. %35 of my score is due to history is being less than 5 years. They all said they want me to get a $500 CC and put 5% on it and pay the bill each month. This will put history on the report and a low CC ratio. Do this for 3+ years to get any benefits of it. umm NO! Reason i have low history is because i paid things off early to keep from having to pay high interest. Doesnt matter what it is, i don't like debt but the loan officers and our economy wants it. So your obligated to go in to debt and pay interest no matter what you do.
That "something else" is history.. but thats enough about me.. just a generic question that we all have same and some have differ ideas. We all make risks on things we do, its how we handle it and move on. But getting label in a group without knowing the real details and seeing what the issue was, your being labeled. Like i said, system was made for the rich to stay rich and keep select few in check were they belong. To me having a flat rate on loans only makes more sense to those that pay on time, pay off early and loaner still makes money. IF somebody defaults then take to court, but dont just pass it on as high risk to other low scoring people. If they pay you on time and consistently, then they should see a break in the rates, not the life time of the loan. So if i have a 10k loan and you want %10 interest due to a low score.. I paid you half it on time and never had any issues, the interest should have gone down to typical loan rate, not stay the same? Even if you already got your 10k back on time, but you still want more..
I have and yes it does hurt. According to 2 credit counclers and 2 bank loan officers that look at my reports.
Biggest hurt is history. %35 of my score is due to history is being less than 5 years.
Then your score is going to increase over time, as you build a longer credit history. That's a self-fixing problem.
Quote:
They all said they want me to get a $500 CC and put 5% on it and pay the bill each month. This will put history on the report and a low CC ratio. Do this for 3+ years to get any benefits of it. umm NO! Reason i have low history is because i paid things off early to keep from having to pay high interest..
That's a stupid response on your part. Don't you understand that if you pay off the credit card charges each month on or before the statement due date, you pay no interest at all?
Credit card interest rates are quite literally the only interest rates a financially responsible person never needs to concern themselves about, because they always pay off the card balance in full every month and never pay a dime of interest. I have ten cards right now, and I don't know or care what the interest rate is on any of them, because I don't charge more than I can pay off at the end of the month and so never pay any interest on any of them.
Learn how to properly manage your money, and you'll eventually end up with a high credit score. The system isn't so much rigged to favor the rich as it is rigged to penalize the irresponsible (or to be fair, the very unlucky, like those hit be big medical bills). I had a good credit score back when I was a student and barely had two quarters to my name. You don't have to be rich to have a good credit score.
I have and yes it does hurt. According to 2 credit counclers and 2 bank loan officers that look at my reports.
Biggest hurt is history. %35 of my score is due to history is being less than 5 years. They all said they want me to get a $500 CC and put 5% on it and pay the bill each month. This will put history on the report and a low CC ratio. Do this for 3+ years to get any benefits of it. umm NO! Reason i have low history is because i paid things off early to keep from having to pay high interest. Doesnt matter what it is, i don't like debt but the loan officers and our economy wants it. So your obligated to go in to debt and pay interest no matter what you do.
That "something else" is history.. but thats enough about me.. just a generic question that we all have same and some have differ ideas. We all make risks on things we do, its how we handle it and move on. But getting label in a group without knowing the real details and seeing what the issue was, your being labeled. Like i said, system was made for the rich to stay rich and keep select few in check were they belong. To me having a flat rate on loans only makes more sense to those that pay on time, pay off early and loaner still makes money. IF somebody defaults then take to court, but dont just pass it on as high risk to other low scoring people. If they pay you on time and consistently, then they should see a break in the rates, not the life time of the loan. So if i have a 10k loan and you want %10 interest due to a low score.. I paid you half it on time and never had any issues, the interest should have gone down to typical loan rate, not stay the same? Even if you already got your 10k back on time, but you still want more..
My god you ramble on nonsensically in this forum.
Stop it with the pity party. A close friend bounced between foster homes and barely got through school/life with poor choices that lead to bad credit. Fast forward to his mid life, self made success, building a business then selling it for millions.
You are simply ignorant in your life choices.
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