You know what I think? Today’s credit industry is in desperate need of revision. Credit companies are so caught up with the idea of getting as much money out of people that they do whatever they can to bleed dry the people they are in the process of loaning or are currently loaning too, rather than getting together and realizing that if they were more lenient about things – such has credit history – that they may make more money in the long run.
Think of the main reasons for bad credit. Bounced checks, missed payments, overspending… nothing malicious there, just honest (usually) mistakes. Credit companies should be more forgiving. Instead, they’d rather wring the wallets of the people who can least afford it in the first place – the ones who bounced checks because they didn’t have enough money, missed payments because they paid other bills instead, etc. They’ll make these people jump through hoops for bad credit loans, require a much higher down payment, hit them with higher annual fees, and jack up the interest as much as legally allowed. All the while telling people, “Oh, you have bad credit? No problem. We’ll help you!” Help? Help? I consider that to be more of a hindrance than help. It’s sickening. And it’s no wonder that so many people struggle with debt, and that so many give up and file bankruptcy, lose their house to foreclosure, etc.
Thoughts?
I dunno.. I think it’s a pain, as someone who has had bad credit in the past, but once you look past the first impression of unfairness, it really comes down to a basic financial principle: the risk-return trade-off. These people are willing to loan money to those with bad credit, but since there is extra risk involved, they’re going to assure themselves a higher interest rate for taking on that extra risk.
Alot of times those places STILL wont give loans to people with bad credit. Not to mention that some bad credit can be mistakes can be identity theft and still not be removed from your credit. UGH.
I think the whole “Bad credit? We’ll help” thing is problematic for some but great for others.. I mean, if someone has terrible credit and simply cannot pay anything back, these solutions available to them are just going to screw them around even more with higher repayment options and the like.
Then, like becky said, it’s good for those who have accidental bad credit
IDK, i don’t really fully understand this so i’m probably talking shit, but i’m sure i’ll encounter it first hand one day and probably be thankful for such solutions.
As a person who made a few mistakes along the way, I can’t begin to tell you how true this blog entry was. I’ll be paying my debt until I’m 99 years old. I live paycheck to paycheck. One WHOLE paycheck doesn’t even cover a third of what they want as a MINIMUM payment. Sometimes I barely even have food on my table or money in my own pocket.
There is two differnt types of credit, good credit and bad credit. I try my best to stay away from bad credit as much as possible *eg. random purchases when I cannot afford it, remaining visa balance at the end of the month, applying for credit card after credit card (that ruins your credit score, even the ones where you sign up to get a free – something), and stick with building up my credit (no balance on my credit card), paying whatever extra I have at the end of the month into my debt (I paid off my credit cards with a line of credit which has an extremly lower interest rate), by this time next year I’ll be paid off!
I am just thankful that I have alot of banking friends, and group of trusted individuals at my local bank that I can ask any and all my financial questions to. I am investing my money, yet I am still in debt. I am thinking big picture.
With the bad credit, we’ll help companies, I dont think the people who turn to them for their services have really tried all their options with their bank, or other banking financial institution, or who ever actually uses them are actual idiots and deserve to be screwed around with high interest rates, thinking that they dont have to pay until such and such a year etc… Those are unresponsible individuals.