When it comes down to it, fico scoring has become big business and what is so sad is that, we the consumer are being screwed every kind of way. First it makes no sense for us who want to purchase a home to have to pay practically 3 times the cost of the home over 30 years, like the bank and our government are doing us a favor by stretching the loan for that long. Look at all of that interest we pay for the first 10 years on the loan before we really see the principal going down.
I never understood why it should take us more than 10 years to pay off a home loan, and be charged such a ridiculous amount of interest, at the great profit of the bank. We don't do that when a consumer purchases a 50,000 SUV or luxury car that is well now the same price of the average American home of the 1970s. Financing is no more than 72 months.
Just think about it, we are charge tons of fees upfront to get the loan, then to add insult to injury, have a Fico scoring system in place for the banks to screw us more, simply because the bank can decide based on your fico score how much interest they can screw you/us the consumer again out of money. What burns me up, is the fact that the banks not a consumer group decided to use our middle score, instead of our highest fico score. To me if they are going to set rates based on our Fico score, then the fair thing to do is use our highest fico score. BUT I KNOW I AM NOW PREACHING TO THE CHOIR.
Then let me stop PREACHING and keep talking about if you dont have 20% equity or down payment on your home, the banks say, well lets charge the consumer a PMI so that if the consumer defaults, then the bank is protected. Well what about he consumer?
All i can get is disabillity insurance that is expensive as (u know what) and that will only protect me for a certain amount of time before they tell me that I am well enough to take my black booty back to work.
I agree with NEwWorld, its all a big scam, how well we handle our credit doesn't mean an unexpected job loss, that caused me to stop making timely payments even t hough I had excellent credit h istory before i lossed my job, or an unexpect phone collection account that seems to automatically appears on my credit report (even though I paid the bill in full before cancelling the service) simply because the phone company wants to be a BUTT for me cancelling service with them, or how about cellular provider not letting you cancel cellular service without paying the early cancellation fee that you were tricked by one of their shark salesman who didn't tell you that you were basically signing up for another cellular service with the same company and if you refuse to pay the early termination fee after realizing how you were swindled into signing another contract, it will go on your CR as a collection. But of course, it's how well you handle your credit.
IF i am not mistaken when a collection account is added to our CR, we lose those precious FICO SCORE POINTS, AND EVEN IF THE COLLECTION ENDED UP ON OUR CREDIT REPORT BY MISTAKE, and we get it taken off...WE DON'T GET THOSE LOSSED POINTS INSTANTLY BACK. How fair is that?
After I pay off my house in full, which I plan on doing within these next 15 years, I won't need credit the way I do now. WE SHOULD ALL HAVE A 6 MONTHS EMERGENCY FUND WHERE WE HAVE 6 MONTHS OF LIVING EXPENSES SAVED IN THE EVENT WE LOSE OUR JOBS OR GET SICK TO PROTECT OURSELVES FROM MORTGAGE FORECLOSURE OR RUINING OUR CREDIT. I have learned that once you have financial independence, which means, SAVE, SAVE, SAVE, and SAVE, you won't need credit BECAUSE YOU WILL BE ABLE TO PAY CASH FOR EVERYTHING YOU WANT TO PURCHASE ANYWAY.
Actually, the consumers of scoring systems--FICO, Vantage, or something--aren't you and me the borrower. It's the creditors. The scoring system that brings in the most subprime borrowers will ultimately be the scoring system that reigns.
Not so sure this is the forum where the choir congregates, although I count myself amongst the choir.
A single 30 day late payment can cost one as much as 100 points on a FICO score. That 100 points could cost some working folks more money, as a percentage of income, than Ken Lay or Jeff Skilling spent on lawyers.
If a credit card company was raising your APR because someone you lived with is having credit problems, or a credit card company can raise your APR based on an issue you have had with another one of your cards (whether it is your fault or not), or our insurance rates can go up because of some credit issues, the so be it!
These credit card companies scam their way through loop holes in the system until lawmakers put a stop on it. Then they find new ones. This is and has been going on since the concept of credit has started. They are nothing more then legal loan sharks. It is all of our personal responsibility to understand the ramifications of a loan shark if you default on your loan. So take personal responsibility and NEVER get yourself into a credit situation that you can't get out of. With that being said, I am going to and I am calling my sister now to have me put on her perfect credit history.
I'm a firm believer in using the credit system to our advantage--which from my viewpoint is basically to all but boycott it.
So I say get credit cards, but charge just enough for them to remain active. Once I pay off my latest card, I'm going to wait a couple of months, then charge a pack of chewing gum, then get the bill and PIF.
And if they decide they don't want to give me a decent mortgage because of a charge-off from a year ago or a child-support judgment that they put on my credit DESPITE me being current, then I'll have no problem whatsoever giving the USA the FINGER and buying a home overseas where they don't have credit scores.
- - - - in a credit-scoring postnuclear Stone Age...