Page 1 of 5 123 ... LastLast
Results 1 to 10 of 49
Thanks Tree29Thanks

Thread: Credit Bureaus - Big Business Killers

  1. #1
    New Member rwb72's Avatar
    Joined
    Jun 2018
    Posts
    445
    Thanks
    60

    From
    Florida

    Credit Bureaus - Big Business Killers

    They're not the only ones to blame, but they're a significant starting point for any discussion about what inhibits, if not downright kills, business in America. It was bad enough before they came out with the credit "score" concept. Now, we live our lives confined by this insidious number, that decides what house we may or may not live in, what car we may drive, and if we can buy things or not.

    Most appalling is the effect on housing. This is where banks and housing complexes are to blame as well. To buy a house, unless quite wealthy, one must get a home loan. First thing that happens is the home seller "runs your credit". Supposedly, this is to determine if you are trustworthy in terms of paying monthly housing payments. OK. But how is this check ordinarily done ?

    ALL WRONG! That's how. It's done by consulting with 3 credit bureaus, from which an average credit score is derived. And these are based on your past experiences with paying for a very wide variety of things, almost all of which has nothing to do with housing. So you could be denied a home loan for which you would be paying the same monthly payment you are now, and have successfully been paying for many years.

    All this could be from misinformation in a credit report, or from bad credit on non-housing things (jewelry, musical instruments, sporting goods, whatever)

    What it comes down to is a prospective home buyer should be rated for a home loan based on his/her record over the past 3 years or so, in paying FOR HOUSING. To deny a home loan based on anything other than one's HOUSING PAYMENT RECORD, is simply killing business. It kills the sale for the real estate company, deprives the buyer of the home, and the bank loses the interest it would/should have made from that loan. Crazy.

    Bad for the bank. Bad for the home seller. Bad for the home buyer. Only one who gains is the credit bureau, for handing out information not really related to the transaction. How much business is going down the tubes, because of credit bureaus, and banks stupid enough to go to them, instead of previous landlords for housing credit information.

    You could have never missed a housing payment in 50 years, never even been late once, and be denied a home loan because you missed a couple of cable TV bills, or don't have some revolving cards or whatever they're called. Lastly, credit bureaus even chip down your score based on inquiries made about your credit. What the hell does that have to do with it ?
    Last edited by rwb72; 11th July 2018 at 05:50 AM.
    Thanks from johnflesh and One

  2. #2
    Senior Member NeoVsMatrix's Avatar
    Joined
    Nov 2013
    Posts
    8,632
    Thanks
    7654

    From
    NY
    Couldn't get that loan , huh ?

  3. #3
    Thought Provocateur NightSwimmer's Avatar
    Joined
    Jun 2014
    Posts
    38,813
    Thanks
    36929

    From
    United States
    Quote Originally Posted by NeoVsMatrix View Post
    Couldn't get that loan , huh ?

    Being untrustworthy has consequences.

    Who knew?
    Thanks from BigLeRoy and Kallie Knoetze

  4. #4
    Shut up and vote Addiction Solitaire Champion, Double Deuce Champion, Queen Jewels Champion, Ray Ray Shuffle Champion, Twins Champion, Blow Up: Arcade Champion, Bunch - Time Trial Champion, Znax Champion, Zoo Keeper Champion, Sobics School Champion, Swap a Smiley Champion, Makos Champion, Dino Drop Champion, Flower Frenzy Champion, Some Puzzle Champion, Funny Bubbles Champion, CubeZ Champion, Dinky Smash Champion, Fun Fun Animals Champion, Fruit Fabriek Champion, Raft Wars Champion, Rainbow Monkey RunDown Champion, Raft Wars Champion, Crime Puzzle Champion Blueneck's Avatar
    Joined
    Jun 2007
    Posts
    49,639
    Thanks
    27707

    From
    Ohio
    Quote Originally Posted by rwb72 View Post
    They're not the only ones to blame, but they're a significant starting point for any discussion about what inhibits, if not downright kills, business in America. It was bad enough before they came out with the credit "score" concept. Now, we live our lives confined by this insidious number, that decides what house we may or may not live in, what car we may drive, and if we can buy things or not.

    Most appalling is the effect on housing. This is where banks and housing complexes are to blame as well. To buy a house, unless quite wealthy, one must get a home loan. First thing that happens is the home seller "runs your credit". Supposedly, this is to determine if you are trustworthy in terms of paying monthly housing payments. OK. But how is this check ordinarily done ?

    ALL WRONG! That's how. It's done by consulting with 3 credit bureaus, from which an average credit score is derived. And these are based on your past experiences with paying for a very wide variety of things, almost all of which has nothing to do with housing. So you could be denied a home loan for which you would be paying the same monthly payment you are now, and have successfully been paying for many years.

    All this could be from misinformation in a credit report, or from bad credit on non-housing things (jewelry, musical instruments, sporting goods, whatever)

    What it comes down to is a prospective home buyer should be rated for a home loan based on his/her record over the past 3 years or so, in paying FOR HOUSING. To deny a home loan based on anything other than one's HOUSING PAYMENT RECORD, is simply killing business. It kills the sale for the real estate company, deprives the buyer of the home, and the bank loses the interest it would/should have made from that loan. Crazy.

    Bad for the bank. Bad for the home seller. Bad for the home buyer. Only one who gains is the credit bureau, for handing out information not really related to the transaction. How much business is going down the tubes, because of credit bureaus, and banks stupid enough to go to them, instead of previous landlords for housing credit information.

    You could have never missed a housing payment in 50 years, never even been late once, and be denied a home loan because you missed a couple of cable TV bills, or don't have some revolving cards or whatever they're called. Lastly, credit bureaus even chip down your score based on inquiries made about your credit. What the hell does that have to do with it ?
    Not necessarily bad for the banks. They can charge a higher rate and supplement the risk. I prefer they be extra cautious and not take our economy to the brink of collapse rather than give loans to anyone who walks in the door.
    Thanks from BigLeRoy

  5. #5
    Senior Member NeoVsMatrix's Avatar
    Joined
    Nov 2013
    Posts
    8,632
    Thanks
    7654

    From
    NY
    Quote Originally Posted by NightSwimmer View Post
    Being untrustworthy has consequences.

    Who knew?
    When i got here initially in 2006, trying to rent an apartment.. the landlord was like "you have no credit history.. i need 10 month rent up front." Had to go to my CFO at the time and ask for a 21k check.

    Try to get a credit card... bank is laughing in my face. took my half an hour at the time to pull from the bank teller how one gets a cc card with no history.
    Thanks from bajisima

  6. #6
    Moderator HCProf's Avatar
    Joined
    Sep 2014
    Posts
    22,928
    Thanks
    11937

    From
    USA
    Quote Originally Posted by Blueneck View Post
    Not necessarily bad for the banks. They can charge a higher rate and supplement the risk. I prefer they be extra cautious and not take our economy to the brink of collapse rather than give loans to anyone who walks in the door.
    Not every one is a credit risk tho or a deadbeat who does not pay their bills. Anything can happen to your credit...divorce can be a big one. I have a friend who went through a divorce. Her divorce took almost 5 years and her legal bill was over 40K. She and her husband owned a small business and he intentionally bankrupted it and stopped paying for everything. The problem was her name was on everything they had. They lost everything in the end and she can't even lease an apartment at this point because of her credit. She did manage to finance a car...but at 18% interest. Medical bills and student loans can also destroy your credit..even if you are working everyday. My identity was stolen back in 2007 and it was quite a challenge 5 years or so after that. The person used my insurance card for several doctors around the area, had a surgery, and left behind a bunch of bills. They also opened credit cards under my social security number. It was not easy to clean that up. I think credit should be based on a case by case basis and not just on a number.
    Thanks from johnflesh, Libertine and One

  7. #7
    Anarquistador StanStill's Avatar
    Joined
    Dec 2013
    Posts
    10,624
    Thanks
    11141

    From
    Work
    So if someone can't pay off the surround sound system and vacation they put on their credit card, why should I trust them to pay off a home loan? If you have bad credit from not paying off credit card debt, you have bad credit. If I was going to loan someone a few hundred thousand dollars, I'd want to know if he skipped out on credit cards and had the debt sold to a collection agency, even if he managed to pay the rent on time for the 3 apartments where he lived in the last 3 years.

    Building credit takes time, and undoing bad credit takes longer.
    Thanks from boontito, NeoVsMatrix and Blues63

  8. #8
    Veteran Member
    Joined
    Jan 2014
    Posts
    13,244
    Thanks
    3256

    From
    California
    Quote Originally Posted by rwb72 View Post
    They're not the only ones to blame, but they're a significant starting point for any discussion about what inhibits, if not downright kills, business in America. It was bad enough before they came out with the credit "score" concept. Now, we live our lives confined by this insidious number, that decides what house we may or may not live in, what car we may drive, and if we can buy things or not.

    Most appalling is the effect on housing. This is where banks and housing complexes are to blame as well. To buy a house, unless quite wealthy, one must get a home loan. First thing that happens is the home seller "runs your credit". Supposedly, this is to determine if you are trustworthy in terms of paying monthly housing payments. OK. But how is this check ordinarily done ?

    ALL WRONG! That's how. It's done by consulting with 3 credit bureaus, from which an average credit score is derived. And these are based on your past experiences with paying for a very wide variety of things, almost all of which has nothing to do with housing. So you could be denied a home loan for which you would be paying the same monthly payment you are now, and have successfully been paying for many years.

    All this could be from misinformation in a credit report, or from bad credit on non-housing things (jewelry, musical instruments, sporting goods, whatever)

    What it comes down to is a prospective home buyer should be rated for a home loan based on his/her record over the past 3 years or so, in paying FOR HOUSING. To deny a home loan based on anything other than one's HOUSING PAYMENT RECORD, is simply killing business. It kills the sale for the real estate company, deprives the buyer of the home, and the bank loses the interest it would/should have made from that loan. Crazy.

    Bad for the bank. Bad for the home seller. Bad for the home buyer. Only one who gains is the credit bureau, for handing out information not really related to the transaction. How much business is going down the tubes, because of credit bureaus, and banks stupid enough to go to them, instead of previous landlords for housing credit information.

    You could have never missed a housing payment in 50 years, never even been late once, and be denied a home loan because you missed a couple of cable TV bills, or don't have some revolving cards or whatever they're called. Lastly, credit bureaus even chip down your score based on inquiries made about your credit. What the hell does that have to do with it ?
    Mr. rwb72,

    Being a beneficiary of the system, maybe I'm a little bias, since when I refied for the second time in two years, my credit score was above 800. As such, I got a 2.75% home loan, no points, and very low closing costs.

    The point being that banks want to make sure the loan will be good. They don't know you from Adam, so the only thing they can go by is your credit history. Maybe you did pay your mortgage regularly, but you let other things slip, so they don't know if you are trustworthy. If you don't have a revolving credit history, they can't tell if you pay your bills or not.

    With regard to your last point, only certain inquiries ding your credit. It is an indication on how often you have applied for credit, and tells the bank that lots of other financial institutions are looking into your history, again, a sign of financial trustworthiness.

  9. #9
    Veteran Member bajisima's Avatar
    Joined
    Mar 2012
    Posts
    46,174
    Thanks
    28202

    From
    New Hampshire
    Quote Originally Posted by HCProf View Post
    Not every one is a credit risk tho or a deadbeat who does not pay their bills. Anything can happen to your credit...divorce can be a big one. I have a friend who went through a divorce. Her divorce took almost 5 years and her legal bill was over 40K. She and her husband owned a small business and he intentionally bankrupted it and stopped paying for everything. The problem was her name was on everything they had. They lost everything in the end and she can't even lease an apartment at this point because of her credit. She did manage to finance a car...but at 18% interest. Medical bills and student loans can also destroy your credit..even if you are working everyday. My identity was stolen back in 2007 and it was quite a challenge 5 years or so after that. The person used my insurance card for several doctors around the area, had a surgery, and left behind a bunch of bills. They also opened credit cards under my social security number. It was not easy to clean that up. I think credit should be based on a case by case basis and not just on a number.
    Medical bankruptcy in the US is also a massive ordeal. Even with health insurance it can leave one with thousands and thousands of dollars in debt or bankruptcy. Also, try and get a job without them pulling a credit report. I think its extremely unforgiving and biased against women who often are hit after a divorce with credit issues. Most companies just look for that single number without an explanation. My son was turned down for a job at 18 because he had a low score due to "insufficient credit." WTF? He had just turned 18, was he expected to have a ton of credit at that point?
    Thanks from rwb72

  10. #10
    Shitposting Rank 4 Missle Command Champion johnflesh's Avatar
    Joined
    Feb 2007
    Posts
    21,477
    Thanks
    11714

    From
    Colorado
    I don't think the point is whether someone is working well within the system, its the system itself that is up for debate.

    Many mention bad credit, or not being able to get a loan - not understanding what they are saying. Often a little bad credit, or credit-in-use is actually better for you than if you have no credit history or massive debt. So that doesn't really make a lot of sense, even in a snarky, PH kind of way. And is ultimately irrelevant with respect to the OP's point - if you actually read it you might see that.

    As an example: The current home I own now, I was almost denied a loan because I was paying my taxes monthly and was behind by about 2 full years. However the IRS and I have an agreement and I fulfill that agreement each month - which keeps me "current." Many contractors (I was at the time) and business pay off their taxes over time, monthly, quarterly or even yearly. So even though I passed all credit and employment checks, I was almost denied simply because the mortgage company "didn't like" that "type of bad credit." In the end, I did fight that and even though nothing had changed and I provided no new form of credit to cover the IRS, the mortgage company relented because they didn't actually have a leg to stand on. And the kicker? I provided this information to them from day 1 and they told me then it would be okay, not a problem. Until it was.

    Many people would have walked away from that deal and there would be contractors, agents, inspectors and appraisers (as well as my earnest money) out quite a large sum of cash simply because a company didn't like something on a person's credit report. Even if that something is under agreement and to-date, satisfied.

    This proves that some forms of "credit" are arbitrary and not outlined. They are not based on outlined policy and can be in the eye of the beholder, an overly critical mortgage agent, or credit analyst, or loan officer.

    To me, that's its own little bubble that needs to be popped too.
    Last edited by johnflesh; 11th July 2018 at 10:09 AM.
    Thanks from Blues63, rwb72, bajisima and 1 others

Page 1 of 5 123 ... LastLast

Similar Threads

  1. Replies: 48
    Last Post: 11th July 2015, 01:40 PM
  2. ABC News to close all bureaus but DC
    By michaelr in forum Economics
    Replies: 37
    Last Post: 5th March 2010, 02:48 PM

Tags for this Thread


Facebook Twitter RSS Feed