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Valued Contributor
p-
Posts: 2,633
Registered: ‎06-05-2008

Re: SARCASM?


juggalo9er wrote:

i guess my arguement back is that some people are destined to have less than stellar credit right from the get go. my point in case is that someone who comes from a middle to upper class family may be able to add their son or daughter as an authorized user to their credit thus boosting their score. now keeping your "model is perfect" theory in mind, this person who has been an au may show perfect history but could careless about paying back the sum borrowed. in comparision someone who grew up in a less than stellar income model may have never been informed about credit thus has to build fromt he bottom up never being given that "boost". i would more less compare the credit system in the nation to that of the educational system ...a failure.


I see your point, and agree that the model is a long way from perfect.  But I'm not sure if there's a better way to predict whether someone will repay a loan besides past behavior.

In your example of an upper middle class kid added as an AU, I think they really are more likely to repay a loan.  Having a parent who understands enough about credit to do this implies that they are teaching the kid as well, and also probably increases the chance that the parent will bail them out if they get into trouble.  With those reasonable assumptions, the kid is more likely to repay, and thus should be scored higher.  Remember, not all models consider AU accounts.  And if that's the only history I doubt anyone will give the kid a six figure mortgage.

Calling the credit system a failure implies that the nation or our society has a responsibility to build a system that works for everyone.  We don't have a system; we have thousands of banks, lending institutions, and private parties willing to lend money at various prices based on history of repaying.  Trying to create a system that will force people to lend to higher risk borrowers is a recipe for disaster.  For both the lender, and the borrowers.

I came from a low income family.  My father didn't have so much as a high school diploma, and worked two dead end jobs for most of my childhood.  All I knew about credit was a vague notion from my parents that it was important to pay your bills.  And I made mistakes that still haunt me...  When I joined here my credit was in the 500's.  Luckily, nobody lended me any huge amounts of money, so after getting my crap together and learning about credit, I am now able to qualify for just about any offer.

My score then said I was unlikely to repay a loan, and it was true.  My score now says I will repay it, and it is also true.  While far from perfect, in my experience credit scoring as a predictor of behavior works.

What I like most about the way scoring works, is that you can change it.  With a little research and self-education, or even just paying on time long enough, you can go from 500's to 700's and up.  Really, as soon as you begin to care about credit and learn how it works, you begin to become less of a risk, and your score steadily improves.  

I can't think of a better way in general for it to work, even though I would "tweak" a few things in the algorithm if I could.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

Senior Contributor
Open123
Posts: 4,155
Registered: ‎02-23-2011

Re: SARCASM?

[ Edited ]

p- wrote:

Calling the credit system a failure implies that the nation or our society has a responsibility to build a system that works for everyone.  


+1

 

While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

Valued Contributor
p-
Posts: 2,633
Registered: ‎06-05-2008

Re: SARCASM?


Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

Moderator
Revelate
Posts: 9,485
Registered: ‎12-30-2011

Re: SARCASM?

[ Edited ]

p- wrote:

Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.


Mediocrity by another name.

 

Getting back to this topic, @juggalo9er you'd be surprised at how many truly wealthy people have uglier reports than I do: they don't care.  As for the trust fund kids, well their concept of money management and credit reports is pretty limited too: don't read too much into this forum on people adding their kids as AU's to give them a jump start, one's actions still dictate the results in this instance.

 

If one never misses a payment that individual will have a 720ish FICO score after a year, and better after that.  Being late or missing payments and other things is not intrinsic to any economic class, one little boost does not equate to superstardom.  It is an education issue, but it's not unilaterally tied to a given social or economic strata.

 

This applies elsewhere too: my father was Yale//Harvard educated and he didn't tell me a bloody thing about navigating college.  Thanks dude!

 

Fundamentally a classic parenting goal is to have your children be more successful than you were: if I do ever raise children, you can be darned well assured they will absolutely be taught about what I've learned about credit reports / scores / etc. among other things (*cough* college assuming they go).

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
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Valued Contributor
juggalo9er
Posts: 1,520
Registered: ‎10-24-2013

Re: SARCASM?


on Revelate wrote:

p- wrote:

Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.


Mediocrity by another name.

 

Getting back to this topic, @juggalo9er you'd be surprised at how many truly wealthy people have uglier reports than I do: they don't care.  As for the trust fund kids, well their concept of money management and credit reports is pretty limited too: don't read too much into this forum on people adding their kids as AU's to give them a jump start, one's actions still dictate the results in this instance.

 

If one never misses a payment that individual will have a 720ish FICO score after a year, and better after that.  Being late or missing payments and other things is not intrinsic to any economic class, one little boost does not equate to superstardom.  It is an education issue, but it's not unilaterally tied to a given social or economic strata.

 

This applies elsewhere too: my father was Yale//Harvard educated and he didn't tell me a bloody thing about navigating college.  Thanks dude!

 

Fundamentally a classic parenting goal is to have your children be more successful than you were: if I do ever raise children, you can be darned well assured they will absolutely be taught about what I've learned about credit reports / scores / etc. among other things (*cough* college assuming they go).


on this not i grad sunday with a bachelors...

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Senior Contributor
Open123
Posts: 4,155
Registered: ‎02-23-2011

Re: SARCASM?

[ Edited ]

p- wrote:

Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.


If memory serves, I read about something along those lines in one of my Econ classes during University.  Right, I think it was from a fella named Marx.  Not too long ago, we fought a cold war against the implementation of this very notion.

 

PS - Juggalo, congrats on graduating!

Valued Contributor
juggalo9er
Posts: 1,520
Registered: ‎10-24-2013

Re: SARCASM?


Open123 wrote:

p- wrote:

Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.


If memory serves, I read about something along those lines in one of my Econ classes during University.  Right, I think it was from a fella named Marx.  Not too long ago, we fought a cold war against the implementation of this very notion.

 

PS - Juggalo, congrats on graduating!


rofl just saw the typo where i said i was grad.......

in regards to the marxism i would argue that we are on the course right now! in all honesty we are already more or less a socialist society imho its only a few more steps away...if everything in this nation were equal the "wealthy" would not be paying such a disproportionate sum of the taxes in the nation. in all honesty i do nto pretend nor will i ever pretend to be rich (i work for a cable company) but the fact that i can literally pay nothing in federal taxes and still recieve a $9700 refund says something.  although i do strongly disagree with the socialist tendencies in this article is embelishes what i am trying to say

http://bigthink.com/praxis/the-problem-with-rich-kids sorry for the typos i make but almost every night i have to take pain medicine of i end up in pain to the point where i am doubled over

the beatings will continue until moral improves Wal-Mart 300 lowes 500 cap 1 3000 Barclay rewards 800 upromise 3800
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Senior Contributor
Open123
Posts: 4,155
Registered: ‎02-23-2011

Re: SARCASM?

[ Edited ]

juggalo9er wrote:

rofl just saw the typo where i said i was grad.......

in regards to the marxism i would argue that we are on the course right now! in all honesty we are already more or less a socialist society imho its only a few more steps away...if everything in this nation were equal the "wealthy" would not be paying such a disproportionate sum of the taxes in the nation. in all honesty i do nto pretend nor will i ever pretend to be rich (i work for a cable company) but the fact that i can literally pay nothing in federal taxes and still recieve a $9700 refund says something.  although i do strongly disagree with the socialist tendencies in this article is embelishes what i am trying to say

http://bigthink.com/praxis/the-problem-with-rich-kids sorry for the typos i make but almost every night i have to take pain medicine of i end up in pain to the point where i am doubled over


Thanks for the link!

 

This is where the author lost me, "But the best suggestion on offer today is to widen access to quality pre-school education."  Whatever the cure to inequality, it sure aint this. All the things that are really important one learns to succeed in his profession is never learned in school, bur takes place out of it.  

 

*Edited* - I don't think being "rich" is important for most people, but being able to keep the fruits of his labor, whatever that might be, is the issue.

 

 

Valued Contributor
juggalo9er
Posts: 1,520
Registered: ‎10-24-2013

Re: SARCASM?

+1 the premise is sound unfortunately however

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Valued Contributor
p-
Posts: 2,633
Registered: ‎06-05-2008

Re: SARCASM?


Open123 wrote:

p- wrote:

Open123 wrote:  While a noble and worthy idealistic pursuit, the results of trying implement a system which works for "everyone" will ensure it works for no one.  A few people are allergic to peanuts, but it makes no sense to ban peanuts from the rest, only to ensure no one will ever suffer an allergic reaction.  It's far more efficient to have a system where those who do suffer from peanut allergies or a troubled credit history has the tools available to navigate pass their obstacles, i.e., peanut warnings, credit education.

 This, like many other debates comes down to the definition of "fair."  Some say that fairness is everyone dealing with the conscequences of their choices, while others say fairness is equal results regardless of choices.  Call it equal opportunity versus equal results.


If memory serves, I read about something along those lines in one of my Econ classes during University.  Right, I think it was from a fella named Marx.  Not too long ago, we fought a cold war against the implementation of this very notion.


Exactly.  

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL


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