should credit scoring be banned?

[TheCoxwain]

I think no one has the right to collect information about me and sell that information to others.

Maybe it is legal ... but I feel violated when banks and car dealers reduce us to a single number. And control our lives with it ....

its a tread mill that you are supposed to keep running on...

I just fucking hate it

[mainegreen]

1. Once you work your way up to a good score, it's pretty nice though...

[TheCoxwain]

2. I have a decent score .. but I still resent it.

[carlyhippy]

96. yeah, I worked really hard to pay things off so I can have a good score

but you are right, it is really a stupid thing alltogether and shouldn't be important. I have better things to do with my time than worrying about my score.

[intheflow]

3. Yes.

I've always thought it was bullshit, and now it's been rendered meaningless given the current state of the economy.. I wouldn't mind a credit scoring system for banks, though. :evilgrin:

[WriteDown]

53. Uh...

There is a credit scoring system for banks.

[intheflow]

60. Really?

I've never seen or heard about them, and they must be bullshit anyways since I'm sure most of the big banks that collapsed had dandy ratings just minutes before they collapsed.

[WriteDown]

69. Not too hard to find...

http://www.ehow.com/how_4474851_check-banks-credit-rating.html

[valerief]

4. You should be rich via bootstraps like the people who don't need the score.

:sarcasm:

[Burma Jones]

5. Nope

I would suggest though that the process is far too arcane.......

[Terran]

29. Agreed...especially the notion that only people with good credit

(who presumably have more money to begin with) should receive low interest rates is insane. Higher interest rates for poorer people just make it more difficult to maintain or obtain good credit. That's what's insane, to me. There should just be one interest rate for everyone.

[WriteDown]

38. Not exactly familiar with the concept of risk

are you? :eyes:

[JonLP24]

43. But if two people are paying for the same thing

It is unfair for one person to have to pay for more then the other person based on risk. It does make it harder for a poor person to improve their credit or even afford a place to live.

[WriteDown]

48. So you'd be as willing to lend your car to

someone with a perfect driving record as someone with a slew of DUI's and a grand theft auto conviction?

[JonLP24]

51. I wouldn't lend my car to anyone that wasn't covered by my insurance

Doesn't matter if they have a perfect driving record or not. I also never do background checks on my friends so I'd never really know.

[WriteDown]

52. If you owned a rental home....

would you rent it to someone who has a history of skipping their last months rent, or damaging previous properties? This is not a hard concept to understand.

[JonLP24]

57. I'm sure if you keep loading the question I will eventually say yes

But I don't support it. Just because someone has some kind of history like that it doesn't mean they are unable to change. But it doesn't always apply that way, I remember when I was real young I couldn't get an apartment with NO credit without paying first month's rent, application fees, and deposits which would make me so broke that I couldn't pay next month's rent so it's possible a rent seeker could be a victim of overcharging. Now that I know my credit score lowers when I get denied I was lowering my credit score the whole time I was looking for an apartment that I could actually afford. My position is everyone pays the same for the same thing.

[WriteDown]

Its not a loaded question....

its a very accurate analogy. I remember when I was young, I had 3 roommates. That's how I got past the deposit fee.

[northzax]

88. people do pay the same

some people do pay more, or less, to borrow money. Credit scoring is, for better or for worse, how that's decided. one thing it does have that's good? it's blind. your credit score doesn't take into account your race, education, looks, anything. only your historical ability to pay stuff back. (oh, and mine is terrible)

[TheCoxwain]

59. A credit score usualy does not reflect late payment on rent

[WriteDown]

62. If rent is left unpaid....

It goes to collections. It does show up eventually.

[intheflow]

68. Not always true.

If the person skips out and leave no forwarding address, it's hard to send it to collections b/c where exactly are they supposed to collect from?

[WriteDown]

71. Its just tied to your social on your credit report...

then the debt goes to collections and they are responsible for trying to track you down. Not unusual.

[juno jones]

92. They can find that out from my previous land lords. I have references.

That my interest rates on CC's can change, or my car insurance change on the late reception of a bill by my cable company sucks. There should be limits on what credit scores are used for. Otherwise they become discriminatory.

[enlightenment]

58. But it has already been established that an individual's score

can be negatively impacted by factors that have nothing directly to do with them; if a CC company lowers your limit because you shop at a store where people with low scores shop, that will impact your score, for example - and several CC companies have been doing just that.

So your analogy should include asking if they would be willing to lend their card to someone with a perfect driving record who lived next door to someone with a slew of DUI's and a grand theft auto conviction.

Private, for profit companies determine credit scores. They also are the same companies that frequently screw up, trashing people's credit because of errors that have nothing to do with the people impacted by their decision.

That's a problem that has nothing to do with risk and everything to do with a screwed-up system that has most of the world by the short hairs.

[WriteDown]

65. You misunderstand...

I think the way that credit scores are calculated now is arcane, but I am not on board with having NO credit scoring system as some others seem to be.

[TheCoxwain]

66. Agreed. Get this. Even closing a credit card after paying it up can lower your score.

if that is the oldest card you have.

Credit score depends on duration .. so closing a long held card takes away 'time' from your history. Very convenient.


This means that they are choosing to ignore the parts of my history that suit them.

[BalancedGoat]

93. Wouldn't work.

Unless you want a single, mandated interest rate for all loans. If you make it so banks can't charge different customers different rates but don't mandate a single interest rate for all banks they will deal with the increased risk in one of two ways. First, they could simply raise rates on everyone so as to mitigate the risk with higher rates for people with good credit. Second, they could simply stop giving loans to risky people. End result? The banks that don't loan to people with poor credit would be able to charge a lower interest rate because they only deal with low risk loans. People with good credit would still be able to get a lower rate than people with poor credit making the whole idea pointless.

[angrycarpenter]

6. yes

If only to get rid of the Free Credit Report dot com commercials. Seriously.

[MADem]

7. It can be inaccurate. If you dare to save your money to buy things,

even if you pay your recurring bills on or ahead of time, you aren't too popular with those people. Doesn't matter if you paid cash for your car or your house--they like you to be using that "credit card," and if you don't, why, you're not a good enough mark, er, person, for them.

[TheCoxwain]

27. THAT is the single biggest reason to revamp the system.

[MADem]

70. I don't owe anyone anything, save recurring bills and annual taxes.

I self-finance, because I'm disciplined. If I can't afford it, I save for it. I have a reasonable amount of assets, too. I don't even know what my score is, it's probably awful because I don't have a shitload of plastic.

[DrDan]

8. well . . . . they will continue the practice - making some sort of "grade" for potential lendees

at least these are made available so you know where you stand. Do away with the current system and it is likely it will be replaced with a system that will not be shared.

[Dervill Crow]

9. I think so . . .

I've worked really hard to improve a lousy credit score. I co-signed on a car loan with my daughter, though, and after multiple lenders checking my score, it's dropped again! I'm royally p-i-s-t over that.

[MercutioATC]

10. No, but the criteria and process should be transparent.

There's nothing wrong with a lender being able to gauge how likely they are to get paid back...but the secrecy is just stupid.

Make it clear what people need to do to be viewed as good credit risks to lenders.

[Debi]

17. Agreed.

Knowing HOW to correct a lower score and why it got low in the first place (beyond a late payment here or there) would be nice.

[RB TexLa]

11. So if I lend money to someone who makes $2000 a month and they are paying me $1000 a month

when they come to you and ask for money they are going to pay you back at $1100 a month, you think that you being able to find out what they owe and are paying me violates them?


Of course not everyone commits fraud. But say its 15 out of every 100 people who do, do you think lenders should just be able to pick them out based on looks?

[Hannah Bell]

12. yes. 1) process not transparent; 2) you don't have right to more than

one (i think) free report/yr - of your *own* information!

3) some obvious problems, i.e. if you pay cash for everything you'll have a worse rating than someone in debt

4) used in situations where it has no particular relevance, e.g. for hiring

5) *your* information is sold, you don't know to whom...

[JonLP24]

15. That is one thing I hate

Using credit scores in the process of hiring someone. Another thing I hate is when they use background checks to look up crimes they already paid for. I.E. completing jail, probation, parole, etc.

[WriteDown]

55. That is a shame...

Daycares should be hiring more child sex offenders. After they've paid for their crimes of course.

[JonLP24]

67. Sure daycares should be able to do that as well as Schools

But that isn't what I mean. Many people released from prison remain unemployed and homeless and then that makes me wonder wth are they supposed to do? But when it comes to certain jobs they should be able to do background checks involving schools, highly sensitive jobs, police departments. But a regular job no I don't think so. Otherwise people right out of prison remain homeless and unemployed.

[WriteDown]

72. What if your a convicted embezzler?

Would you want them working in your business?

[JonLP24]

74. If they paid their debt to society

AND if they are more qualified compared to others seeking employment.

[WriteDown]

75. If you say so...

I wouldn't want them dealing with any money at MY business. I wouldn't want a professional car thief working as a valet either.

[JonLP24]

77. If they are applying to be your companies treasurer then it becomes relevant

If their criminal history is relevant to the job if they are applying to. But if they are for example applying for a job as data entry and the only money he or she deals with is recieving checks then it doesn't matter to me. I should've listed all possible relevant crimes with relevant jobs but if someone is applying to be a valet then it doesn't matter if he or she was convicted of drug dealing at a younger age.

[WriteDown]

78. Wouldn't you need to know their history to know if their

past crimes would be relevant to the job they were doing. Tax fraud / accountant. Bank robber / bank teller. Daycare worker / child predator. :shrug:

[JonLP24]

79. You're right

Ok do background checks to find relevance but don't just deny people because of ANY criminal history. If there is relevance to the convictions/jobs then that creates a high level suspicion but if someone is looking to earn an honest living rather then live a life of crime that creates problems when employers look down on them. Also those guilty of those crimes can actually help those in those positions by teaching them on what to look for like that guy guilty of check fraud from Catch me if you Can is now working for banks to help them catch check frauders so I wouldn't neccessarily deny them because they can be useful.

[WriteDown]

82. Nothing wrong with that idea nt.

[DKRC]

36. Credit score used for car insurance

Doesn't make sense to me. Two competent drivers, no accidents/tickets, but if one has a lower credit score their insurance rate goes up. Your credit score has nothing to do with your ability to operate a car.
Makes no sense to me.

:shrug:

[Fresh_Start]

64. Poor credit risks are more likely to be unprofitable customers

for insurers.

Someone who has good credit and financial stability may be more likely to pay out of pocket rather than file a claim.
An someone who abuses alcohol or drugs is more likely to be both a poor driver and poor credit.

[JonLP24]

13. Yes. Because many credit card companies

send unsolicited pre-approved credit cards to people right out of high school knowing full well that many of them will take it, use it and end up not able to pay it off for a variety of unjust reasons and therefore their credit score is affected. I understand the reason for it, alot of companies want to know that the individual can be trusted to pay off whatever.

[napi21]

14. If credit scoring/rating co's went away, it would take forever to get an

approval to buy a car, house, or any other big ticket item. You can't blame a lender for making sure you will be able repay your loan, and if each one of them had to call every individual place that provided credit to you over the years, it would take a LOT of timeon all sides.

The processes they all use to calculate that score might need some scrutiny and changing, the the process is the most efficient I can think of.

[yodoobo]

45. It didn't take forever before there was credit scoring.

Credit scoring didn't become ubiquitous until the mid to late 90's

I bought my first house in 1993 with no scores involved. Took about 45 days to close I think.

Prior to that I had several credit cards, a number of which were approved "instantly"

With that said, I'm ok with credit scoring for credit.

It needs to be banned for insurance, employment and any other purpose.

[napi21]

80. We bought our first house in 1965. It took about 2 months for the S&L to approve the loan..

BTW, it was a whopping $10,000 mtg!!!!!

I agree with you on the insurance. I can't see where credit plays a role.

I too have gotten several CC's approved instantly, and I agree that's a nice thing.

For employment, I think it depends on what the job is. If you are applying for an accounting position....maybe it does matter. If you are applying for a completely non-financial position, probably not.

[Wapsie B]

16. Well I sure as heck shouldn't have to pay for my score

and should be able to access my credit report anytime I want with all 3 credit bureaus.

[JonLP24]

18. Someone told me...

If a car dealer for example looks up your credit score and you fail to have a high enough score to buy a car that affects your credit score making it lower. I don't know if it is true or not but if so that is BS especially when you have to pay for it.

[TheCoxwain]

24. That is true .... Each time you seek credit .... you lower your score.

[tammywammy]

40. No, not every time

If I'm looking to purchase a car and I go to Honda, Chevy, VW and BMW all in the same two week period and they all pull my score it counts as 1 hit. If they're all the same "type" of pull and in that short of a time frame it counts as 1. If I spread it out over a few months, then I'd get dinged each time.


Also, it'll only drop your score a couple of points.

[SoCalDem]

31. When vendors check credit scores, the automatic assumption is that the person being checked on

is planning a large purchase.. If a LOT of these impending purchases suddenly pop up, it sends up red flags...like maybe this person is suddenly in need of borrowed money.. did they lose an income, did they run out of savings..are they planning to buy more than they can afford..

[JonLP24]

35. So why lower the score?

I think credit score should be based on what you paid or didn't pay off. Not whether you've been denied for a car loan. Assumptions can be wrong so if they use that to lower a credit score that is wrong as well.

[TheCoxwain]

39. Indicator that you are running out of funds for your operations .. and need more credit

[intheflow]

73. Since that's how the banks operate,

they assume everyone else is just as irresponsible as they are!

[SoCalDem]

42. Because it sends out messages of intense and sudden NEED..

It scares lenders if they see a sudden change in a pattern..

[JonLP24]

47. Well that is wrong

It could be a first time car buyer being denied at one place, thinking they can get a car at another place even though they plan and could afford the car meanwhile during the process they are lowering their credit score without even realizing it.

[SoCalDem]

50. That's why people should always get a PRE-APPROVAL for a maximum loan amount

BEFORE they go car shopping...and not have their credit report run BEFORE they are ready to sign on the line..

A car dealer cannot "run you" until you have filled out paperwork:)

[Orrex]

19. Credit scoring shoud be banned as a criterion for employment eligibility

I've never heard a single justification for it that doesn't boil down to "we want to fuck you over because you've had the gall not to be independently wealthy."

[TheCoxwain]

22. The arguement is that Credit score is an indicator for "Responsibility" .. Try telling that to a

cancer patient driven to bankruptcy.

[Orrex]

86. Exactly!

Until credit scores are broken down into categories with each entry detailed per person, then any simple three-digit credit-worthiness assessment is about as meaningful as an astrological reading.

[Freddie Stubbs]

41. People with poor credit likely have money problems. People with money problems are more likely to

embezzle money.

[intheflow]

76. Wow, that's a broadbrush!

How many times have you heard of people embezzling money form employers? Not enough times to make this justification anything more than a stereotype--especially given the bad state of so many people's checkbooks. And where does that place Madoff? He had plenty of money and embezzled more--but I'll bet he had a great credit rating!

[Orrex]

85. The biggest money problem of all is 'unbridled greed'

And that's hardly confined to people with 275 credit scores.Also, the huge majority of people with bad credit scores have never embezzled money; it would be as sensible not to hire someone with a score of 780 on the grounds that lots of multi-millionaires have embezzled.Therefore this objection is untenable.

[Greyhound]

20. Yes, failing that, private agencies with encouraging debt as their goal

should be replaced with a completely transparent public agency working under clearly defined and easily accessible rules.

[LostinVA]

21. It shouldn't be used for renting, car insurance, and most employment

For credit cards, mortgage, and cars, okay.

And, it should be regulated WAAAAAAAAAY differently, and consumers should have MORE rights than the credit people, and the credit score companies shouldn't be allowed to have any other credit or financial-related businesses.

[Gormy Cuss]

32. Right, because it's designed to be a credit-worthiness measure, not a character witness.

The mission creep on credit reports and credit scores is, well, creepy. In the past I had the displeasure of working directly with credit bureau staff on a project and they were as bad as debt collectors in terms of taking responsibility for the disruptions caused by errors or limitations in their rating systems.

[LostinVA]

37. Exactly!

[Bill McBlueState]

23. there should still be credit scoring

but it should be handled by the government, and the formula should be publicly available.

[HereSince1628]

25. At least for purchases made with cash.

FOr the life of me I can't understand why pre-paid car insurance should be linked to credit score.

Ther are all sorts of correlations they could choose, but this one is designated as punishment for being poor.

[Oregone]

26. No, but it shouldn't be used for more than an arbitrary reference to start from

I think its useful for a bank to have a starting point at what someone's past history is (we need GOOD loans here). But, it alone shouldn't determine qualifications and terms. It shouldn't be meant to do any bank's homework for it.

[SoCalDem]

28. Unless you pay cash, you leave a paper-trail and once you sign your name

on someone else's document, it's theirs... to do with what they will.

If you boil it down to its "bones", it just this..

Person A asks you for a loan.. Don't you think it's prudent for you to know if Person A has paid back previous loans to others, in a timely manner? they are asking YOU for something of value...that's YOURS, and I see nothing wrong for YOU to wonder how they have handled things like that in the past..

Would you loan your car to someone who has had a string of DUIs & car-crashes?..or let someeone live in your house, if they have a history of throwing wild parties and trashing/looting houses they have lived in before?

We ALL have a history, and as long as we don't ask someone else to loan us something of theirs, it's probably no biggie, but the minute we ask for credit, or the use of something of value, they have every right to know our past..

[grasswire]

30. yes

The data dossier on each of us is an Orwellian nightmare; a slavemaster with a whip applied liberally.

There exist plenty of ways to prove your worthiness to buy a house or a car aside from a credit score. What did lenders used to check? Your job, two credit references, and a bank reference. How many people defaulted on lenders in those old, gold days? Less than now, I'll wager.

I don't think it would be a bad thing if credit tightened up and people had to wait to be approved for a purchase. But then I haven't had an actual credit card for twenty years and haven't owned a car for almost ten years now. Simplicity, simplicity.

[WriteDown]

46. Oh boy..

Nothing like having a lender call your job! I imagine that is one of the reasons that practice was stopped. And anyone can create two phony references. I could get 10 friends to swear I was the Prince or Persia. If you want to go back to the ways of the 1950's, there was a whole lot of things that you'd have to change, Commie :).

[grasswire]

84. did you read what I wrote?

Two credit references: that means two businesses who have done business with you on credit. Nordstrom. A car dealership. Something like that.

And I hate to tell ya this, but creditors, landlords, banks already verify your employment.

You see, a whole industry has developed around this artificial framework of middlemen. Everything costs more because of middlemen.

It has also corrupted health care, college financing, and even charitable giving.

Eliminate the middleman, and the savings will be felt everywhere.

[Gormy Cuss]

33. Nearly every company has the right to collect and sell information about you.

That's why we need comprehensive privacy laws.

[SeattleGirl]

34. What I hate about credit scoring is that they don't have to tell you

what their formula is for figuring out what your credit score is.

It's all top-secret, and THAT pisses me off. Here's a bunch of pencil pushers, making decisions on me and countless other people, and yet we are not allowed to know how that stuff is figured out.

I hate it too.

[Matariki]

44. Well it seems like it should be more fair and logical at any rate.

I know someone who declared bankruptcy two years ago with a much higher score than a person who hasn't been late on a payment in years. Go figure. I think they have some weird esoteric techniques of coming up with the score, possibly involving possum entrails.

[kickysnana]

49. Good luck with that...I have a British credit report on a Virginia ancestor from 1788. n/t

[VenusRising]

54. Yes.

Especially now that they are requiring credit checks to get a job. People will never be allowed to get out of debt if only those with good scores get jobs. It's discriminatory and a very bad business practice.

[nonconformist]

56. Should be banned in some instances, completely revamped in others.

Credit score should play no part in auto insurance or job applications. If a job is dealing with large sums of money, a background check would be more applicable than a credit check. Anyone can have "bad credit" for a variety of legimate reasons through no fault of their own.

As far as everything else, it needs to seriously be revamped. For the past 7 years or so, we've paid cash for nearly everything, including vehicles. We have diligently saved up, all while making payments on all our other bills, and paid cash for large purchases. That is the epitome of the smart, responsible thing to do. However, we are punished for this responsibility on our credit reports.

[slackmaster]

61. You can opt out of the system if it really bothers you

Just pay cash for everything.

[Hannah Bell]

81. No, you can't - being as credit reports are used for things such as hiring.

[slackmaster]

89. If you never use credit you won't have any information on file with the credit bureaus

If they don't know who you are, employers can't get any information from them.

[Hannah Bell]

91. no information means you get rated lower or denied for hiring, auto insurance, & other

rentals, things they now use credit reports for.

you *will* be assimilated.

i paid cash for everything, finally got a credit card because without it, i couldn't do simple things like rent a car - even if i paid cash.

that was in the 80s, it's worse now.

[slackmaster]

95. I would question the legality of denying a job or insurance to someone with no credit history

Sometimes you have to fight for your rights.

[Flying Dream Blues]

63. Will it get rid of the pirate earworm commercials? If so, yes please! :P nt

[Nye Bevan]

83. No. If credit scoring was banned

then an unofficial system would spring up in the shadows. Banks are not going to lend money to people unless thay have some idea whether they will be repaid. The "shadow" system would be less transparent, and it would be *very* difficult to correct bad information on it. With the current system you can see *everything* in your credit report (once a year, free of charge, by law) and there are mandated procedures for fixing incorrect information.

[bamacrat]

87. I think it needs to be revised.

There are some people, I dont know how many anymore other than my parents, but they only use credit when they have to. To buy cars or houses people need credit, if you dont have $2500 dollars to buy a flat screen on hand dont buy it. Credit should be scaled back to large purchases, not just any want or need. Then if credit was only available for people buying necessities such as cars, homes, college tuition or small business loans peoples scores would hold more credence. I know that would drastically alter many peoples living styles, but it has seriously gotten out of hand. Its because people made $50,000 dollars a year are told they are rich if they put everything on credit and live pay check to pay check, taking out a second mortgage, anything to increase all the stuff you can have. If people would save their money (in banks) after 5 or 10 years tons of people would have all this saved money to spend, but by then people will have learned how to live within their means (maybe). Money is out of whack. People who play football get $70 million dollar contracts to play football, our actors get paid $20 million a movie, which cost $100 million to make. Yet teachers and the average people get their wages cut so corporations can save money by hiring cheap foreign labor.

Not to rant but..

Now that I think about it credit is in a way class warfare. If you have money why would you need credit? If you made $1 million dollars or more a year you can buy anything. I'm still excluding houses in this situation because cars aren't that expensive comparably.

:rant:

[Lyric]

90. Yes.

Or at least drastically changed. Someone's trustworthiness should not be determined arbitrarily by a computer bureaucracy that takes nothing individual into consideration.

We are people, not numbers.

[rucky]

94. At the very least, the methods should be disclosed.

the system is ripe for abuse, as things stand now.

[BlooInBloo]

97. If you don't like it, don't buy their money...

There are plenty of problems that need government intervention with money lenders of the various sorts. But the notion that they should sell their money with no information on the purchaser's ability to pay for it is just plain dumb.