Credit score system, unfair and way too strict (Texas, average, range)

[Sevenseas]

Originally Posted by sean98125

Your score went down because your payment history showed that you were a higher risk for non-payment than most other consumers. You mismanaged your credit and that is what your credit score reflected.

I got slammed by one creditor with exorbitant fees because I was one day late paying another creditor. So I ended up have 3-4k applied to the higher interest rate. In other words they changed the interest rate, which is what they can do, especially if you have a low rate. It's as if they look for any excuse to raise your rates. Incidentally, we are not in a perfect world, sometimes you will be late a day or two for some unforseen reason, such as illness or have to leave town for an unexpected emergency. The creditors really couldn't care less and are reluctant to lower your rates. Have you ever had an annual fee applied to your balance just when you were near your credit limit? They then charge you an over the limit fee and may also readjust your fees to a higher rate. Years ago if you were over the limit your card declined. Some creditors will happily let you go over your limit and charge you fees and a higher rate also.

[Sevenseas]

Originally Posted by TimtheGuy

Certainly you don't think that seeking credit couseling (bad way to go by the way) and paying off less than you owe should not hurt your credit rating do you??

I do agree the default interest rates, cumulative late fees, penalties and how the credit card companined "push" debt are way out of control, but people in this position should certainly have their credit score hit. Credit scores are there to determine creditworthiness and probability of default. The person you speak of defaulted and that needs to be refected in the score.

When you agree to pay back your debts, whether at a high rate or negotiated lower rate it's an honorable thing to do. It's better than not paying at all, going bankrupt, changing your name or using someone else credit score to obtain new credit. The credit industry is bilking consumers and our legislators don't seem to notice.

[Sevenseas]

Originally Posted by natalayjones

Yes of course I'll just ask those little green men who you mentioned earlier to put that money in my checking account. I would love to have lived some of the lives you all have where you're just able to save money without starving to death because obviously you all have been blessed beyond measure.

I just wonder why all those stupid people who live paycheck to paycheck haven't figured out that all they need to do is put a $1,000 in the bank? Since you have all the answers, maybe I should have hired you to be my financial advisor because basically what you're saying is that if I lose my job today on 01/31/08 - and let’s say I get paid every week so I'll get my last check on 02/08/08 - that I should be responsible enough to have money to cover me and my family. Let's see how much that would be.

Rent: $800 - course I guess I could move back home but then I'd have a skip on my credit.
Car Payment: $210 - course I guess I could give my car back but then I'd have a repossesion on my credit.
Car insurance: $90 - course I guess I could drive without insurance, but then my license would get suspended.
Lights: $110 - course I guess I could sit in the dark but they would probably report me to child services.
Water: $50 - ditto from above
Phone/Cable/Internet Combo: $150 - course guess I could do without but how would I job hunt without internet & how would they call me if I had no phone?
Gas for my car: $200 - course I guess I could catch the bus - might be a little harder to get to interviews but oh the money I'd save.
Daycare for 4 weeks: $600 - course I guess I could leave him alone by himself.

So that's about $2,500 a month. So let’s say I was laid off for 2 months I would need close to $5,000 in the bank to cover my living expenses. And that's not including food, clothing, tithes, or odd little things like oil changes, field trips, $50 co-pays for unexpected Doctor visits, neighborhood kids throwing a ball through the window, etc... I wonder how many people - hold on let me break it down - working people - let me break it down further - working middle class people because I am far above the poverty line - who are living within their means without the aid of government assistance have $5,000 just sitting in their bank accounts.

So once again, I will ask that if you're going to make a suggestion it be one that might be helpful to someone.

And to make this clear, I'm not talking about myself because I am handling my finances just fine but there are tons of people out there who have been thrown for a loop because of a life circumstances and it's hard to recover. Do you think all homeless people are there because of addictions and laziness?

What about the housewives who lost their spouse? Insurance money & savings won't last long when you have two kids.

What about the teachers who take pay cuts to get kids supplies? In case you hadn't heard, teachers have a very high percentage of debt because cost-of-living isn't comparative to their wages.

But this post was not about how to better manage the money that some people don't have to start with - it was about the OP feeling that the ranges of credit levels being skewed.

So back to my original statement, the thing I don't like about credit ratings is that they are so unforgivable.

It sucks when you get laid off from your job. Then you lose your car. Then you lose your house. So then you work two and three **** ass jobs just to feed your family and when you've finally got enough money to try to start over....Oops! Sorry your credit score is toooooo low - can't live here. Oops! Sorry your credit score is toooo low - can't work here! Oops! Sorry your credit score is too low - can't get a car here! This is why so many poor people remain poor people. This is why so many homeless people remain homeless people. This is why people with low credit continue to have low credit because they have no way to improve it because no one wants to look past their credit history. And I don't believe history is always indicative of the future. If that was the case I would be in the field instead of in the office.

That's my opinion and you can quote, argue, debate, dictate, reiterate it as much as you want to cause last time I checked I was allowed to say what I thought without someone mocking me and trying to make me feel like an idiot for speaking my mind.

It is a terrible thing that a credit score can deny you the right to pursue life, liberty and opportunity. People who mismange their finances, for whatever the reason still need a roof over their heads and an a salary that can provide for basic living.

[Sevenseas]

Originally Posted by mrs1885

You answered your own question.

It's not that they get away with it. You apply for credit cards. They aren't necessary to survive. You apply for car loans and home loans. They aren't necessary. It is possible to survive with a zero credit score. It means most of the things that you want now you'll have to put off to have. And in today's society of instant gratification that's not always easy, but yes, it can be done. And it's the best way to get around the system.

I sympathize. My husband and I have gone through major financial upheaval when he was forced to retire due to a medical disability. We lost nearly $100k a year when he did. It's not like we did anything 'wrong', but we had put ourself in the situation we were in. We had bought 2 new vehicles on loans. We had 4 credit cards. We lived in one of the most expensive areas of the country. No, the medical problems weren't his fault. But the financial straights we'd put ourselves in were.

We sold everything we had, packed our things, and moved with our 4 teen agers to TN. We're starting over. And doing it right. No more loans for anything. We sold both vehicles and bought a used car and van that we could pay cash for. The credit cards went to creditors until we can get to them. My husband has a minimum of 6 doctor's appointments a month. We have over $100k in medical bills and more piling up daily. We'd made verbal payment arrangements with a local hospital who turned around and sued us anyway. Lesson learned - get everything in writing, trust no one.

We're finally just starting to see the light at the end of the tunnel. After more than 18 months my husband's disability has been approved. We're taking a good bit of the money and investing it in repairs that need to be done to make our home liveable, such as heat and air that we've lived without all this time. Remodeling the master bath to accomodate my husband's needs. The rest of that first check is going to go to start wheeling and dealing with creditors over all that debt.

I'd love to retire and stay home to care for my husband. But it's not going to happen for a long time. We'd love to build our dreamhome further north in the state, but that's on hold for at least 5 years. We'd love a second home in Maine for the summer months to get hubby away from the heat and humidity here. We'd each love new vehicles so we don't have to keep dumping money into ours for repairs. And some day we'll have all those things. But we won't be playing any financing games to do it. Cash only from now on. As long as the mortgage (yes, we do have one loan) is paid, the utilities are paid, and there is food on the table and clothes on the kids, everything else must wait. Period. It's just part of being a grown up in our opinion.

Check out Dave Ramsey. He's a total kill joy!! LOL!! But if you stick to his plan you'll eventually be free of the credit score monster that's bringing you down!

It's sad that you had to wait so long for your husbands disability to be approved. I had to leave my job because I wasn't able to handle the physical stresses anymore. But luckily, my company offered a buyout. I was penalized because I was under 55 but at least I wasn't fired. I am trying to adjust into a life without a steady paycheck for now, but I'm trying to find less strenuous employment in a era of economic recession. I wish you the best.

[Humanoid]

I got slammed by one creditor with exorbitant fees because I was one day late paying another creditor.

How did the other creditor know you were one day late? A payment that is only one day late will not effect your credit rating. Of course they company you paid late will gladly charge you a big late fee and may raise your rate.

[Magnulus]

Originally Posted by NorthmeetsSouth

I heard on the radio today that the average "poor" person in the US today has at least one color TV, a car, a microwave, a cell phone, dishwasher, air conditioning, etc. The average "poor"person here has a better lifestyle than the average person (not poor) living in Europe..

I don't believe this is necessarily true, especially now days. The Euro is strong and the EU still retains a strong manufacturing and technology base.

I lived in the UK in the late 80's and it was rare to see homeless people as compared to US cities. Also, while the average British family didn't have as much stuff as the average American, they rarely seemed to live in depravity. You didn't have a car? This didn't matter as much as you could just walk to town or the train station. Most people had microwave ovens, stoves, even washers and driers. Their houses were small but then again they never seemed to worry too much about getting a serious disease and how they'd pay for it. You can be house rich and money poor at the same time, if you are drowning in debt.

[NorthmeetsSouth]

Originally Posted by Magnulus

I lived in the UK in the late 80's and it was rare to see homeless people as compared to US cities. Also, while the average British family didn't have as much stuff as the average American, they rarely seemed to live in depravity. You didn't have a car? This didn't matter as much as you could just walk to town or the train station. Most people had microwave ovens, stoves, even washers and driers. Their houses were small but then again they never seemed to worry too much about getting a serious disease and how they'd pay for it. You can be house rich and money poor at the same time, if you are drowning in debt.

the point I was making was not about living in Europe... it was that when the media refers to "poor" people here they are often not really poor. If they were they wouldn't be able to afford all of the "stuff" they have.
Years ago, when I was raising a child on a single income, I saw an article about this welfare mother and how her benefits were about to be cut and how unfair it was. In the background you could see her kids playing their video games on their big-screen TV. I worked for a living and I didn't have a big TV or an x-box for my kid. How come she did if she was collecting welfare? The point is, the media likes to make martyrs out of people by referring to them as poor when they are not.

[Misfit1326]

Originally Posted by TimtheGuy

Huh...I don't see a single mistake on mine??

Actually, I beg to differ....

There are mistakes in peoples credit reports. DOES THAT MEAN EVERYONE? no...but there are a lot of people who have reported mistakes on their credit report. If you don't believe me, please go do some online research. One source would be ripoffreport.com regarding collection agencies. And that site, in case you haven't heard of it is respectable.

Also, I am one of those people who have found several mistakes on my credit report.

I recently started monitoring my credit reports (all 3 of them along with my credit scores) and found that in one of my credit reports my old car loan which is closed now is not marked as "closed/current" or on some sort of satisfactory note...instead, it shows as REPOSSESSION!! with a balance of $6500!! ....mind you not only did I pay off that car last year, BUT it was also traded off and the funny thing is that the other company they they report to doesn't show any kind of repossession on that vehicle and it IS marked as "closed/current" -- I called the financial company who financed that vehicle and asked them why they had reported it like that and I was told that they show nothing in their record of them reporting it as that...so now I have to open a dispute case with the credit company regarding this...
Did this hurt my credit? OF COURSE IT DID...thanks to that "small mistake" my credit score is 525...now after they remove this error will my credit score bounce back up? I SURE HOPE SO.

and while other scores aren't much to brag about (574 and 568 -- not because I'm rolling in debt, but because I don't have much credit established, and I have a few other accounts) they put a repossession on my credit report. that's horrible.


Second mistake I found was a HOSPITAL BILL yeah so the balance isn't 20k or anything like that but it was still put under a "derogatory" status even though I paid it off back in March. And the company that reported this error? NCO!! the one collection company which is known to screw over customers and harassing them. I have already put a complaint to the attorney general of Philadelphia for their fraudulent practices. WHY?

Because even though I paid off my small debt of $106 in MARCH, what did they do at the end of March? they went ahead and reported it to ALL 3 credit companies as "unpaid/seriously past due" among other stupid comments they like to put on there. And my balance was not $106 anymore...it was actually $266.00 WITH a balance of $106...I have the original hospital bill showing $106.

And to those of you who will "kindly" reply saying "WELL, YOU SHOULD HAVE PAID IT WHEN IT WAS DUE AND THIS WOULDN'T HAVE HAPPENED TO YOU"

Yeah, I do realize that...but you need the money first, right?! right.

So yes, there are mistakes on your credit report...there's few people that get truly lucky and their report is always clean and what not.


NOW....

To those saying that the credit report is fair and what not...I am not going to argue with you there, because it might be fair within the business point of view but it's not fair for those people who fell into EXTREMELY hard times and got behind and now they're trying to build up their credit again.

Unfortunately, we are not all "rich" and able to NOT live paycheck to paycheck.

My husband and I are those people. We make close to $4grand a month (which at the time I worked in financial planning, I was told that with that amount you'd be able to save and live comfortably) yeah...3 years ago maybe...but not in 2008... and that is the sad damn truth.

I just got married back in November (I am 22 by the way) and I (same goes for my husband, he is 23) barely have credit and the little credit i have doesn't look so good even though I have been trying to build it by TRYING REALLY hard to pay on time and ANY TIME that I can't make a payment I ALWAYS call right away and I get extensions or go under payment plans -- but they STILL report it to the credit bureau as unpaid, past due 30 60 90 120 etc, derogatory, etc.. oh what I LOVE the most is when you're on a payment plan they actually report it as CLOSE/UNPAID even though the account is NOT in collections is STILL active and you're making payments.

So right now, our credit scores are kind of low. My husband has a better credit score than I do because he DOESN'T have a credit card and he only has a VERY low student loan of 3k

it's been very hard for us to get approved for anything, we were able to get furniture because my mom co-signed on it. AND we were able to get a car because we accepted a SUPER high interest of 20.74% with $456.62 monthly payment on a 2003 USED Toyota Corolla that only cost 10K -- we had no option they were only giving us $2,500 for my old Ford focus and they didn't have any cars that were under 10K -- and sorry I am not going to those cheapo depo car dealers BECAUSE I already got screwed over...ironically with my ford focus that I bought for 6k with a $2,500 down payment. Well, it just so happened that they sold me a car that had frame damage and I wasn't told about it because they didn't give me a TRUE report of the car. (yes, I am expecting smart ass remarks...you should have gotten one yourself it's your fault you deserve it! go ahead... those comments are so ignorant...UNTIL they happen to you..)So I am tired of going to those cheapo depo dealers willing to work with bad credit or no credit people.

It's very hard to save up for anythign when we make a combined income of $3400 monthly and we pay 14 bills which amount to over $2,500 -- that leaves us with give or take $900 which then has to be divided between groceries (food cost is rising by the week yes...I check!) which monthly equals out to $400, plus gas which is $160 monthly (and that's at $3.92 a gallon) and we consider spending money emergency money because you never know when you'll need to go to the doctor, unexpected expenses, etc... and that CHANGES from week to week depending on how much money we have left over after we pay all our bills.

I PLAN EVERYTHING -- I HAVE A BUDGET THAT GOES 6 MONTHS IN ADVANCE and even with all that planning you STILL have unexpected stuff come up...and even with all THIS planning it has been VERY difficult to save up ANY money because most of it is (if not all in some weeks) gone after bills...we need to eat, we need clothing -- I work for a respectable insurance company right now and although I am WAYY entry level at only 10.25 I am required to dress in VERY nice business clothes so that can amount to a large chunk ...and no I don't buy at the mall or expensive stores...I tend to go for Wal-Mart, Target, Ross...etc...But it STILL amounts. same goes with my husband we are both required to dress very nice for work. But unfortunately we are at ENTRY LEVEL positions getting paid 10.25 and 11.00 (per hour) respectivaly.

We have a savings account that so far in the 3 months we've had it, we only have $30 saved because that's all we've been able to afford to take out.

Second, my 14 bills are made up of things WE NEED and some that are required: CAR PAYMENT, RENT ($926 includes cable and water), CAR INSURANCE, ELECTRIC, INTERNET (yes, some will tell me to cut that out but my husband has a business on the side and he requires the internet for this. He is a graphic designer), CELL PHONE (is cut down to the minimum), ROOMS TO GO, a STUPID LOAN which shouldn't even be in my credit report because it was supposed to paid by Financial Aid but communication between THEM, the Univerisity, and myself and they refused to pay it so they put it under "collections" and now I have to slowly ($20 a month) pay $1,600, My husband's store card where he purchased my wedding ring, my credit card that i use sometimes to buy groceries when I can't pay it upfront...but I ALWAYS pay it off within a week, My husbands student loan, MY student loans, our Car warranty, My husband's domain site, and our credit monitoring service.

I honestly think that those of you criticizing those living in not so good conditions or paycheck-to paycheck are people who
1. have GREAT paying job and can manage to get anything you want at any given time...some of you are talking about INVESTING in the stock market...not EVERYONE can invest in the stock market. A lot of times you need $500 dollars if you're going through a discount brokerage. and yeah sometimes there's company where you can invest as little as 0.01cents but you still need to pay fees and what not. For some that's not an option.

2. You've never had any financial stuggles in your life? So therefore you don't know what it's like to fall behind on bills, mortage payments, car payments, etc...So if that's the case, you have no room to talk about what others have to go through in the world of the lower to middle class...hell, even upper middle class is struggling right now.

3. You've never been laid-off from your job? My mother got laid off from her job of 5 years after the 2001 economic fall and it took her 4.5 years to find a permanent jobs...mind you she has a masters degree. She had to work temp jobs for 4.5 years until like I said she found a GREAT job some years ago. When she got laid off she had an "emergency fund" WHICH ONLY LASTED HER A FEW MONTHS. When you lose your jobs, companies DONT GIVE A DAMN they just want you to pay up and if you don't they ********* up. Unfortunately, my mom had 2 kids (a single mother) myself and my sister who she had to support, I tried to help as much as I could but at the time I was only in 9th grade. we had VERY hard times during those years and even though we made it and got by my mom's bills were always late and it wasn't her fault she was working her ass off. She didn't even have insurance because it was VERy expensive thorugh those private companies, that 90% of the time BARELY cover you..and yes, my mom has health problems so it was even higher...thankfully my sister and I always had insurance through healthyKids of florida but when I turned 18 it got CUT OFF and now i was left without insurance until recently that I got my job and I am 22 now. I have asthma so my insurance would have been high too.

You guys think that life is so damn easy but in reality is not as easy to save up money when there's barely any in your bank account...not because you're overspending but because you're tyring to keep up with your bills, trying to feed yourself and your kids, and trying to make it day by day. Why don't you all step into these other people's shoes and live like that for a year or two...then come back here...and start posting your experience.

Not everyone who is in debt, is in debt because they OVERSPENT or have just decided they're going to be a**holes and not pay anything back. Life hits you with whatever it wants whenever the heck it wants and all your planning and crap came come crumbling faster than you can see it crumble. and these emergency funds you so fondly speak of only last for so long and really $1,000? thats BARELY anything anymore!!!
right now it would take my husband and I 6 months to save up $2,500 with BARELY jeopardizing out finances. yes, it's SOOO easy..

There's people out there who have it harder than my husband and I do....and yet, you mock them and make them feel like stupid people who don't know how to manage their money. NO I am not saying everyone is a poor victim of life hitting them hard, because there's a**holes who blantantly go and spend all their money without any thought of consequences and that pisses me off. But you can't rule out the people who have genuinely have been hit things that really are out of their hands.

The cost of living keeps rising but the wages AREN'T that is so unfair.

And Yes, I find it unfair how the credit bureau goes by a number as opposed to a personalized look at your credit, bills, etc...
I have NEVER been late on my car, rent, and my electric bill....but yet my credit score is LOW and i mean LOW because of those times I've been put on payment plans, have gotten extensions etc...It's ridiculous. Now we are stuck with high interest and high payments THAT IS UNFAIR.


And to the person who said that in Orlando you can live in a GOOD area for under $800 in aa 2 bedroom apartment...YOU ARE WRONG!!!!

Unless you want to live in an area where not only you but your kids would be in danger then sure yeah you can live in an area where a 2 bedroom is only $400 -- now there's a few apartments where the rent is $600 for 2 bedrooms and those are gov't funded...the drawbacks are that you have to make a min AND a max and a lot of time middle class people DON'T quality because they make too much but yet they can barely get by with a $950 and up rent for a 2 bedroom apartment that MOST OF THE TIME doesn't include your cable bill and your water bill...we got lucky because we in on a special....right now a 2 bedroom where I live is $1099 (not including your water...it varies but you pay it with your rent...and the cable is $55) case in point is, the area where I live a 2 bedroom starts off at $950 and up. And even in other areas in Orlando it's an average of that price...if not higher. It's sad. so I don't know what this poster was talking about.. "i easily saved you $6,000...." Ok please...yes, it's SOO easy to say but then to do it is ANOTHER thing because you have to incorporate how much she makes her bills, unexpected expenses, etc...GEEZ people have a brain.

[texdav]

Originally Posted by Sevenseas

It is a terrible thing that a credit score can deny you the right to pursue life, liberty and opportunity. People who mismange their finances, for whatever the reason still need a roof over their heads and an a salary that can provide for basic living.

Then start a business and loan them your money. Sure crdit is high. credit for people with bad payment histories. They also many times are up to their necks in debt and are a much higher risk.I know that my credit cards come to me with averasge of 14 days to pay. Never have been late and one time when it was losss;I called and they dropped the interest charge within minutes. I mean crdit card companies that let me use their money nad peole to pay my bills for thirty days and give me money back for purchses for freee as long as I pay them within thrity days;can't beat that with a stick. Cheapest loan their ever has been.

[Huckleberry3911948]

times have changed. people get a bad report card and they wana negotiate the scores.
in K12 its tough love. in the real world its tough, well you know.
late fees count.