p- wrote:
FixMyCredit1992 wrote: Why is it that people with no credit (not bad credit, just a thin file), have a very hard time getting credit. They usually have to be listed as an AU or get a secured card... I don't think it's fair. Everyone should be given a chance. It seems odd for the lenders to look down upon someone with no credit the same way they do someone with bad credit.
It's more accurately described as risky until proven trustworthy.
I would challenge you to put your money where your mouth is. Go to an online lender like proper.com and put up a hundred or a thousand of your own dollars. Be honest with yourself; are you more comfortable choosing borrowers that have a history of repayment, or new users with no history at all?
Go ahead and make the loans, and enjoy the returns. After a year of doing this with your own money, do you think you will feel the same way? If it's your money on the line, are you still willing to give new borrowers a chance?
I think that is a good example. I have $175 invested on Prosper.com at $25 per borrower. Im netting about $7 per month for three years assuming and hoping no one Im invested in defaults, or is late on a payment. My money is literally in another persons' hands.
This is chump change, but it still puts things in perspective how delicate lending can be. If things continue to go well, Ill have no problem bumping my lending up to $750, $1,000 in the next year.
Seeing people with many delinquencies, sometimes as high as 20, or a relatively thin file (to my investing standards) scare me off immediatly. And im just investing $175.
Head over to LendingClub.com or Prosper.com (different sites, same business model - peer to peer lending) and make a free account to get access to other peoples credit reports. It's very interesting to put yourself in the shoes of a lender and deciding if their investment is safe.
https://www.lendingclub.com/browse/browse.action#
You can even ask the borrower questions like "What caused you to need this consolidation loan?", "What are your monthly housing payments?", "Why were you XX days late on XX account?" etc.
AMEX Hilton Ascend: $55,000 | Chase Sapphire Reserve: $30,000 | PNC Points: $17,500 | AMEX BCE (AU): $18,000 | AMEX BCP: $15,000 | US Bank Cash+ $15,000 | AMEX Business Prime: $14,000 | AMEX SimplyCash: $12,000 | Capital One QS: $13,500 | Chase Business Ink: $12,000 | PNC Everyday (AU): $12,000 | JCPenny Store Card: $10,500 | Chase Slate: $9,400 | Capital One QS: $6,500 | (2nd) US Bank Cash+ (2nd): $7,500 | Discover IT: $6,000 | Chase Freedom: $3,500 | Auto Lease: $0/$21,000 | Auto Loan: $0/$18,000 |
TU: 818 EX: 809 EQ: 801
