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But the person made a negotiated effort to honestly pay it back and he/she gets penalized for making those negotiated payments?! That is one reason why this industry is nuts and out of control
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.
But the person made a negotiated effort to honestly pay it back and he/she gets penalized for making those negotiated payments?! That is one reason why this industry is nuts and out of control
The person isn't penalized for making the negotiated payments - the person is penalized because they were unable to manage their finances effectively and their irresponsibility increased the risk to lenders that they would not be paid, or that they would have to write off part of the debt.
The industry isn't out of control in this situation - the borrower is. It isn't the lender that is unable to manage their finances.
I think it's unfair. My credit is wrecked and the only thing I have on it (except for two credit cards...which have low limits, but are always current) are my student loans. I've had them since age...oh, 19, so I've never been approved for anything.
What happens is that every semester, each loan is taken out individually and then later can be "brought" by various companies. However, I only get or pay a few bills. But if a payment is late, then "boom" 15 "delinquencies" show up on my report. Just last fall I was finally (after 8 years) able to consolidate them, so hopefully it will get better. Oh, and than darn "income-to-debt ratio"....that always does me in.
But if a payment is late, then "boom" 15 "delinquencies" show up on my report.
That is because they are all different loans. But here is a novel idea, why don't you pay your payment on time? If you have problems remembering you can set up an automatic payment.
Anyhow, its pretty clear that folks with bad credit just want to whine the "system". If you have bad credit its because something you did not the credit card companies.
I think it's unfair. My credit is wrecked and the only thing I have on it (except for two credit cards...which have low limits, but are always current) are my student loans. I've had them since age...oh, 19, so I've never been approved for anything.
What happens is that every semester, each loan is taken out individually and then later can be "brought" by various companies. However, I only get or pay a few bills. But if a payment is late, then "boom" 15 "delinquencies" show up on my report. Just last fall I was finally (after 8 years) able to consolidate them, so hopefully it will get better. Oh, and than darn "income-to-debt ratio"....that always does me in.
I'm sorry... I missed it. Where was the "unfair" part? Was it that you are being shown as delinquent for making late payments? Or, was it that they use an income to debt ratio to keep people from borrowing more than they could possibly afford to pay back?
I'm sorry... I missed it. Where was the "unfair" part? Was it that you are being shown as delinquent for making late payments? Or, was it that they use an income to debt ratio to keep people from borrowing more than they could possibly afford to pay back?
I'm sorry but that is bull. You have people riddled with debt but yet the banks keep loaning them money and increasing their credit card limits. I know someone who has about $25k in credit card debt yet she makes less than $40k a year. She also has student loans and a car note. I have to hear her bytch and moan about it every week but yet when she applies for something she is approved . I don't know what alot of these banks base their approvals on but they don't just go by the credit score.
I'm sorry but that is bull. You have people riddled with debt but yet the banks keep loaning them money and increasing their credit card limits. I know someone who has about $25k in credit card debt yet she makes less than $40k a year. She also has student loans and a car note. I have to hear her bytch and moan about it every week but yet when she applies for something she is approved . I don't know what alot of these banks base their approvals on but they don't just go by the credit score.
I'm sure the bank had put a gun to their heads when they offered the increased credit limit. I would also go after the gas company who provided the car to get her there, and the phone company for providing the line so she could apply for an increased limit. You really can't be serious are you?
I'm sure the bank had put a gun to their heads when they offered the increased credit limit. I would also go after the gas company who provided the car to get her there, and the phone company for providing the line so she could apply for an increased limit. You really can't be serious are you?
I am as serious as a heart attack. Also not everyone calls in for a credit limit increase. I have one card that they continuously increase without me realizing it until I get a new bill showing my credit line. Anyway that is not the point. The point is you have people with serious debt who are able to obtain things as long as they keep their account current and pay even the bare minimum. Some can and some can't so their credit gets shot and they're not allowed to obtain anything else on credit while others who will quickly file bankruptcy can and will continue to do so.
I am as serious as a heart attack. Also not everyone calls in for a credit limit increase. I have one card that they continuously increase without me realizing it until I get a new bill showing my credit line. Anyway that is not the point. The point is you have people with serious debt who are able to obtain things as long as they keep their account current and pay even the bare minimum. Some can and some can't so their credit gets shot and they're not allowed to obtain anything else on credit while others who will quickly file bankruptcy can and will continue to do so.
That isn't the lenders fault. The lender sees that the debtor is making payments on time and increases the credit limit. The debtor may do a heck of a bad job managing their finances and keeps borrowing more and more money until they can't afford to make minimum payments any more.
Just because you get an increase on your credit limit, that doesn't mean that you have to borrow more money. The lender would be happy if you borrowed more money, especially if you keep making minimum payments every month. But it isn't up to the bank to manage your finances - it is your responsibility.
If you borrow so much that you can't afford to pay it off, it isn't the lenders fault even if they made it easy for you. It is your fault, and your inability to manage your finances should be reflected in your credit score.
neekah18 - This is like blaming the state for instituting the lottery and enabling gamblers. Just because it is there, doesn't mean you have to take it. Now you can disagree with me, and neg post me behind my back if you want. It does not change the way I view credit, it's use, and the responsibilities that need to go with choices. And, last time I looked, I CAN disagree.
Last edited by BagongBuhay; 01-31-2008 at 10:08 AM..
Reason: addition
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. I don't know what alot of these banks base their approvals on but they don't just go by the credit score.
You really can't be serious are you?
