Credit as a deal breaker? - Page 2 - Tilted Forum Project Discussion Community

PonyPotato · 07-16-2008, 02:15 PM

JJ: I dated someone who didn't know how much he owed in student loans, on his truck, or on his credit cards because he just didn't keep track. He only found out how much he owed when he traded in his truck for a new sports car - with the new car on there, it added up to over $80,000. And this was someone who was considering buying a HOUSE.. he never would have been able to afford it, especially right out of college at $40,000 a year. Once those student loans kicked in, I'm sure he was glad he had moved back home.

I do find good money management to be important in determining who I will be in a long-term relationship with. Same goes for Crompsin - we're both in the same boat.

Financial worries can END marriages, why not make sure you're both able to manage your own finances before you tie the knot? A credit score is evidence of that, though knowing a person well and talking about money management and/or sharing expenses teaches you more about how responsible your SO is with money than a piece of paper can.

JumpinJesus · 07-16-2008, 02:22 PM

Quote:

Originally Posted by merleniau

Financial worries can END marriages, why not make sure you're both able to manage your own finances before you tie the knot? A credit score is evidence of that, though knowing a person well and talking about money management and/or sharing expenses teaches you more about how responsible your SO is with money than a piece of paper can.

It's not the finances that ruin the marriage, it's the worrying and the mistrust. The finances are just the excuse we use.

genuinegirly · 07-16-2008, 02:22 PM

Quote:

Originally Posted by JumpinJesus

So much for "Can't Buy Me Love."

We've become so materialistic that we actually think credit determines who we should fall in love with?

Is it materialistic to have good credit? I always thought of good credit as a matter of honor. If one lives within their means, they will have good credit. If one has limited means and they still live within them and have excellent credit and savings, does that not mean they are even less materialistic?

JumpinJesus · 07-16-2008, 02:26 PM

How is one's credit score calculated?

Baraka_Guru · 07-16-2008, 03:12 PM

Quote:

Originally Posted by JumpinJesus

How is one's credit score calculated?

The important thing to remember is that your credit score is more of a balancing act.

Here's a good link explaining just that: http://www.memberhomeloan.com/what_d...dit_score.aspx

Quote:

What Determines My Credit Score?

Your credit score, or FICO score, is a number that reflects your financial responsibility and helps lenders decide if you're a good credit risk or not. Your score is based on - but not part of - your credit report. It's generated at the time of request, then included with the report.
The five factors that determine your Credit Score are:

Payment History (approximately 35% of your score)
picture of a hand pulling a wood block away from a stack of blocks that are piled up beneath a model of a red brick home. The factor that has the biggest impact on your score is whether you've paid past credit accounts on time. However, an overall good credit picture can outweigh a few late payments, and late payments will continue to have less impact over time unless the late payment is a mortgage payment.

Amounts Owed (approximately 30%)
Having credit accounts and owing money doesn't mean you're a high-risk borrower. But owing a lot of money on numerous accounts can suggest that you are financially overextended and more likely to make some payments late or not at all. Part of the science of scoring is determining how much debt is too much for a given credit profile.

Length of Credit History (approximately 15%)
In general, a longer credit history will increase your FICO score. It shows that you can responsibly manage your available credit over time. However, even people who have not been using credit very long may get high scores, depending on how the rest of their credit report looks.

New Credit (approximately 10%)
People today tend to have more credit and to shop for credit more frequently. But opening several credit accounts in a short period of time can represent greater risk - especially for people with short credit histories. Requests for new credit can also represent greater risk. However, FICO scores are able to distinguish between a search for many new credit accounts and rate shopping. FICO scores generally do not equate your rate search with higher credit risk.

Types of Credit in Use (approximately 10%)
Your FICO score will reflect a combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. While a healthy mix will improve your score, it is not necessary to have one of each, and it is not a good idea to open credit accounts you don't intend to use. The credit mix usually won't be a key factor in determining your score, but it will be more important if your credit report doesn't have much other information on which to base a score.
Interpreting your Credit Score

Your credit score lists up to four reasons why your score is not currently higher. These reasons can be very useful in helping you determine how you might improve your score over time, and whether your credit report might contain errors.

If you already have a high score (for example, in the mid-700s or higher) some of the stated reasons for credit concerns may not be very helpful, as they may reference the factors that have the least impact on your score, such as: length of credit history, new credit and types of credit in use.

Here are the nine most common explanations:

Serious delinquency - You have one or more accounts with late payments.
Serious delinquency, and public record of collection filed - you have one or more accounts that have gone to collections
Time since delinquency is too recent or unknown - You have one or more accounts that are recently past due
Level of delinquency on accounts - Your accounts are 60 to 90 days or more past due
Number of accounts with delinquency - You have numerous past due accounts
Amount owed on accounts - You have too much debt
Proportion of balances to credit limits on revolving accounts is too high - the balance on your credit cards is too high
Length of time accounts have been established - your credit history is not long enough to show responsible management
Too many accounts with balances - concern over your debt load

blahblah454 · 07-16-2008, 03:58 PM

How does one go about finding ones credit score? For free.

Baraka_Guru · 07-16-2008, 04:05 PM

Quote:

Originally Posted by blahblah454

How does one go about finding ones credit score? For free.

I know in Canada that if you request one by regular mail, credit bureaus will give you a report for free. At least they did at one point. Have a look into it.

In Canada, the three major credit bureaus are:

Equifax
TransUnion
Northern Credit Bureaus

mixedmedia · 07-16-2008, 04:19 PM

Quote:

Originally Posted by guyy

Oh sure, jorge my man. But what about those poor people who run pawn shops, "consumer credit" outfits, rent-to-own shops, loan sharks, etc.? What have they done wrong? If everyone had good credit -- an impossibility, by the way -- you'd put some nice crapitalists into the poorhouse.

Exactly!

You're the only other person I've seen who has brought up the business of robbing poor people. And don't forget the insufficient funds fees charged by banks.

crapitalist...nice

NoSoup · 07-16-2008, 04:23 PM

Quote:

Originally Posted by blahblah454

How does one go about finding ones credit score? For free.

You can't.

You can check your credit in general for free at each of the bureaus once a year at www.annualcreditreport.com - but it doesn't include the scores.

You might apply for credit somewhere and ask what the score is, but I wouldn't exactly call that free, because even if you don't get whatever product you applied for, it counts as an inquiry and may damage your score.

Quote:

Originally Posted by mixedmedia

Exactly!

You're the only other person I've seen who has brought up the business of robbing poor people. And don't forget the insufficient funds fees charged by banks.

crapitalist...nice

Perhaps this is why my opinion is so different. I don't consider it "robbing poor people." As far as insuficient funds fees charged by banks, it's the same deal.

Again, maybe I'm influenced by being a former bank employee, but these aren't nameless, faceless megacorporations with elite owners and nothing else - they are publicly traded companies. When we buy their stock, we expect it to increase over time - investors (people like you and me) don't want to throw their money away - we want it to grow. It grows mainly because the company is profitable - fees increase the bottom line, thereby bolstering the stock prices.

Do I think that the fees of a lot of check cashing places are outrageous? Sure I do! However, there is more than enough documentation required to get a "loan" - it isn't like the person borrowing has no idea what they are getting in to. It isn't like you accidentally walk into a check cashing store, accidently produce whatever documentation is required, then inadvertantly sign all the forms that plainly disclose the fees. Same with banks - whenever you are opening your account, you should be aware of all the banking policies of that institution. For goodness sake - they are generally holding onto a significant amount of your money - if not the majority of it - and you'll just hand it over and assume that some day you'll be able to get it back when you want it?

Buyer Beware folks. It's easy to blame check cashing places for charging the rates they do, but people still keep going to them. People who have used them before, signed the documents, and have paid the outrageous fees. To me, it's the same thing as someone making the decison to spend their rent money on that brand new 80 Gig Video Ipod - it's a poor decision made generally by willfully ignorant people. Nothing new here, except the scapegoat.

mixedmedia · 07-16-2008, 04:40 PM

oh, and I would never check on or reject someone for their credit score.

JumpinJesus · 07-16-2008, 05:17 PM

If credit scores are so important, why do we have to pay to find out what they are?

mixedmedia · 07-16-2008, 05:26 PM

Quote:

Originally Posted by NoSoup

You can't.

You can check your credit in general for free at each of the bureaus once a year at www.annualcreditreport.com - but it doesn't include the scores.

You might apply for credit somewhere and ask what the score is, but I wouldn't exactly call that free, because even if you don't get whatever product you applied for, it counts as an inquiry and may damage your score.

Perhaps this is why my opinion is so different. I don't consider it "robbing poor people." As far as insuficient funds fees charged by banks, it's the same deal.

Again, maybe I'm influenced by being a former bank employee, but these aren't nameless, faceless megacorporations with elite owners and nothing else - they are publicly traded companies. When we buy their stock, we expect it to increase over time - investors (people like you and me) don't want to throw their money away - we want it to grow. It grows mainly because the company is profitable - fees increase the bottom line, thereby bolstering the stock prices.

Do I think that the fees of a lot of check cashing places are outrageous? Sure I do! However, there is more than enough documentation required to get a "loan" - it isn't like the person borrowing has no idea what they are getting in to. It isn't like you accidentally walk into a check cashing store, accidently produce whatever documentation is required, then inadvertantly sign all the forms that plainly disclose the fees. Same with banks - whenever you are opening your account, you should be aware of all the banking policies of that institution. For goodness sake - they are generally holding onto a significant amount of your money - if not the majority of it - and you'll just hand it over and assume that some day you'll be able to get it back when you want it?

Buyer Beware folks. It's easy to blame check cashing places for charging the rates they do, but people still keep going to them. People who have used them before, signed the documents, and have paid the outrageous fees. To me, it's the same thing as someone making the decison to spend their rent money on that brand new 80 Gig Video Ipod - it's a poor decision made generally by willfully ignorant people. Nothing new here, except the scapegoat.

It's very easy to tell someone who doesn't have another immediate choice not to go into that check cashing place and cash their check so they can go into the grocery store right next door and buy food for their family.

These 'businesses' exploit and make a lot of money off of poor people. You really cannot rationalize it in my mind.

And insufficient funds fees are insane. And yet, if you have good enough credit, your account can be protected from these fees. Therefore, they are largely, what I consider to be, stealing from people who are already in a hard place. And not only that, by taking these monies out of people's accounts, they are making their accounts vulnerable to bouncing even more checks. It's a fucking scam. And the banks have to be making hundreds of millions if not more on them.

NoSoup · 07-16-2008, 06:10 PM

Quote:

Originally Posted by mixedmedia

It's very easy to tell someone who doesn't have another immediate choice not to go into that check cashing place and cash their check so they can go into the grocery store right next door and buy food for their family.

These 'businesses' exploit and make a lot of money off of poor people. You really cannot rationalize it in my mind.

I respect your difference of opinion, but I can't say that I agree

If you can afford to pay the ridiculous fees, you'd be hard pressed to not have the money to buy that $.25 package or ramen or whatever.

Although I understand people come across hard times, and sometimes the difficulty (or sheer expensiveness) is impossible for someone to overcome.

However, I'm talking about the general situation - the "hard" times that can be foreseen - car repairs, insurance premiums, things of that nature that so often result in a trip to one of these businesses. If someone plans ahead and lives within their means (even if that requires them to get a second job or whatever) they should be able to weather the storms, so to speak, and fall back on a bit of money they have tucked away for situations like these.

Quote:

Originally Posted by mixedmedia

And insufficient funds fees are insane. And yet, if you have good enough credit, your account can be protected from these fees. Therefore, they are largely, what I consider to be, stealing from people who are already in a hard place. And not only that, by taking these monies out of people's accounts, they are making their accounts vulnerable to bouncing even more checks. It's a fucking scam. And the banks have to be making hundreds of millions if not more on them.

Banks are probably making a lot more than hundreds of millions - but that's not really the point. Although I see the worth "Exploit" and "Stealing" thrown around a lot when discussions such as these arise, I can't say that I'm comfortable with either term. The fees, conditions, penalties, ect are all laid out in front of you prior to you being required to pay anything. If I was passing someone on the street and told someone that if they give me $10.00 I'll take it and not give you anything in return, then am I stealing if they decide to give me $10.00? I don't think so, they're simply making a really bad choice. I don't see anything different when it's between companies and individuals either, because those companies are composed of individuals.
Especially publicly traded companies, such as many of the banks out there. Not only do the employees of the bank decide what policies to implement, ultimately, the stockholders do - the hundreds of thousands of people - if not millions of people - that own the company.

People are getting exactly what they sign up for. I don't know why that's a surprise, nor do I understand why suddenly offering a service makes you into a monster. The reason check cashing companies charge those ridiculous rates isn't simply for profit - the profit margins are not as high as one might initially think - though I'm not trying to imply they're small, either - it's because the people they are lending money to have such a low repayment rate. If you lend $100 to 10 people and only 6 of them ever pay you back, you need to charge those six a pretty substantial amount to not only break even but to feed your own family at the end of the day.

One could argue that the reason someone would knowly utilize such an expensive loan is because their credit is so poor they wouldn't qualify for a conventional bank loan. It's a vicious cycle that could easily be broken providing no extraordinary circumstances come about - like huge medical bills or whatever.

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I just brought this up to my wife to see what she would have to say, and she gave a really good example.

When intially dating someone, don't you generally try to at least get a grasp of how they are doing financially? She gave the example of going to a singles bar - if someone approached you and you immediately found out that they were unemployed, overloaded in debt, and had no way to repay it - wouldn't that be a huge red flag?

I can't say that I would actually go out and check a future mate's credit rating, nor would I advocate that, but I would say that it does have an impact. Knowing my wife as I do, I can't say that I wouldn't be with her now if she had really poor credit. However, I can tell you that the chances of us dating as seriously as we did (eventually turning into marriage) is not very likely if I had known from the start that she was financially irresponsible.

Fortunately, I lucked out and we both have similar views on finances

mixedmedia · 07-17-2008, 03:18 AM

NoSoup,

I think I have passed my threadjacking quota for this month. Let's just say we agree to disagree and maybe we'll take this up another time. Suffice it to say I think you are very wrong.

But I will say that although 'stealing' is an emotionally charged, inappropriate word for what the banks do with insufficient funds fees, 'exploit' is a perfectly appropriate word to use. I had an experience with my bank a couple of years ago which makes this plain. And that's not whining. It was corroborated by my bank (a large, popular, national bank) - they did what they could to remove the most amount of money possible out of my bank account and into theirs and they admitted it. It may not have been stealing, per se, but it wasn't ethical, either.

Tully Mars · 07-17-2008, 03:38 AM

Quote:

Originally Posted by merleniau

JJ: I dated someone who didn't know how much he owed in student loans, on his truck, or on his credit cards because he just didn't keep track. He only found out how much he owed when he traded in his truck for a new sports car - with the new car on there, it added up to over $80,000. And this was someone who was considering buying a HOUSE.. he never would have been able to afford it, especially right out of college at $40,000 a year. Once those student loans kicked in, I'm sure he was glad he had moved back home.

I do find good money management to be important in determining who I will be in a long-term relationship with. Same goes for Crompsin - we're both in the same boat.

Financial worries can END marriages, why not make sure you're both able to manage your own finances before you tie the knot? A credit score is evidence of that, though knowing a person well and talking about money management and/or sharing expenses teaches you more about how responsible your SO is with money than a piece of paper can.

You make some good points and I don't disagree in that context. But the credit score itself doesn't show all that stuff, it's a number and can be affected by multiple factor. Would I get involved with someone you're describing? Not for long likely. But would I can think of several situations where ones credit score would be >550 and not because they wanted a new sports car.

Now if they wanted to spend money they didn't have while in the relationship, yeah that would end the relationship for me.

07-16-2008, 02:15 PM	#41 (permalink)
PonyPotato Soaring Location: Ohio!	JJ: I dated someone who didn't know how much he owed in student loans, on his truck, or on his credit cards because he just didn't keep track. He only found out how much he owed when he traded in his truck for a new sports car - with the new car on there, it added up to over $80,000. And this was someone who was considering buying a HOUSE.. he never would have been able to afford it, especially right out of college at $40,000 a year. Once those student loans kicked in, I'm sure he was glad he had moved back home. I do find good money management to be important in determining who I will be in a long-term relationship with. Same goes for Crompsin - we're both in the same boat. Financial worries can END marriages, why not make sure you're both able to manage your own finances before you tie the knot? A credit score is evidence of that, though knowing a person well and talking about money management and/or sharing expenses teaches you more about how responsible your SO is with money than a piece of paper can. __________________ "Without passion man is a mere latent force and possibility, like the flint which awaits the shock of the iron before it can give forth its spark." — Henri-Frédéric Amiel

07-16-2008, 02:26 PM	#44 (permalink)
JumpinJesus Junkie Location: Chicago	How is one's credit score calculated? __________________ "I can normally tell how intelligent a man is by how stupid he thinks I am" - Cormac McCarthy, All The Pretty Horses

07-16-2008, 04:40 PM	#50 (permalink)
mixedmedia has all her shots. Location: Florida	oh, and I would never check on or reject someone for their credit score. __________________ Most people go through life dreading they'll have a traumatic experience. Freaks were born with their trauma. They've already passed their test in life. They're aristocrats. - Diane Arbus PESSIMISM, n. A philosophy forced upon the convictions of the observer by the disheartening prevalence of the optimist with his scarecrow hope and his unsightly smile. - Ambrose Bierce

07-16-2008, 05:17 PM	#51 (permalink)
JumpinJesus Junkie Location: Chicago	If credit scores are so important, why do we have to pay to find out what they are? __________________ "I can normally tell how intelligent a man is by how stupid he thinks I am" - Cormac McCarthy, All The Pretty Horses

07-17-2008, 03:18 AM	#54 (permalink)
mixedmedia has all her shots. Location: Florida	NoSoup, I think I have passed my threadjacking quota for this month. Let's just say we agree to disagree and maybe we'll take this up another time. Suffice it to say I think you are very wrong. But I will say that although 'stealing' is an emotionally charged, inappropriate word for what the banks do with insufficient funds fees, 'exploit' is a perfectly appropriate word to use. I had an experience with my bank a couple of years ago which makes this plain. And that's not whining. It was corroborated by my bank (a large, popular, national bank) - they did what they could to remove the most amount of money possible out of my bank account and into theirs and they admitted it. It may not have been stealing, per se, but it wasn't ethical, either. __________________ Most people go through life dreading they'll have a traumatic experience. Freaks were born with their trauma. They've already passed their test in life. They're aristocrats. - Diane Arbus PESSIMISM, n. A philosophy forced upon the convictions of the observer by the disheartening prevalence of the optimist with his scarecrow hope and his unsightly smile. - Ambrose Bierce

07-16-2008, 03:58 PM	#46 (permalink)
blahblah454 Let's put a smile on that face Location: On the road...	How does one go about finding ones credit score? For free.