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Jul 28, 2008 -- Bounced checks, late rent in new credit scoring model
In the aftermath of the housing meltdown, there's been a lot of fingers pointing at Fair Isaac. Lenders have been griping that the supposedly all-important FICO credit score has failed to accurately predict the possibility of default on loans of various types. So there are new initiatives in the works to come up with better ways to figure out who's going to pay and who's going to skip out. Dow Jones Newswires reported that the new models involve looking at bounced checks, utility bill history and the ability to pay your rent in a timely manner. It turns out there's a very real correlation between bouncing checks and default on loans.
Clark previously told you about the trend of people with no traditional credit benefiting from "expanded scoring" models. But this latest wrinkle is where even if you have traditional credit, other things are still being brought into the mix to give a better overall picture of your financial health. So if you're in your 20s and bouncing checks, you've got to realize that kind of behavior can really harm you. Your reputation is on the line.
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Why to people keep blaming credit cards for their financial problems?
Get real, folks. A credit card, debit card, and checking account are all financial tools. Just because you misuse them buying stuff you don't need does not make them bad. Do we make mistakes? Sure, but that's our problem.
Don't blame credit card companies for relying on people's stupidity and greed to get themselves into trouble. How is it that people don't have enough money to save every month, but they find the money to make a car or credit card payment?
Goverrnment not always the answer
Beatrice, Don't forget you are in control of your own destiny. Don't look to the federal government to watch out for you. Watch out for yourself. It is completely within you power to control you interaction with credit card companies. It is not, and never has been the role of our government to protect us. Use cash, the interest rates are great!
Credit Cards
After years of paying off credit cards and recharging it's taken a financial hardship on my bills. I should have closed all my paid off account and never used again.
The credit industry is really a vicious business. Once they got you they can literally rape you of everything. Our congressman and government are just as guilty. They are accomplices and should look out for the little people that put bread on their table.
Please get involve and contact your congressman, senator and have the credit business put a cap on raising the interest rates. All Americans are being raped by all the creditors.
Tell them how you really feel and stress that is nothing is done you will stop electing them and changing parties.
credit rating
Where is the human factor in all of this. As a father I pulled two jobs and still didn't cover all the bills so yes I bounce checks to put food on the table, diapers on my son. But bills where paid wherether at tax return or any time I acummalated extra money. All of this was while I was enlisted in the US Military bills where paid maybe late but paid. So I ask again where is the human factor in all of this.
Credit is permission to lose money
Don't fall for the misconception that credit is a tool. Its a trap. Pay off all credit. Pay off your mortgage. Live on cash. Then tell me how your stress levels changed.
We did it and it is great.
Just Another Scheme To Jack Interest Rates Up
The banks and financial institutions are finding any pretext to jack interest rates up on people to cover up their bad investments. I hope all the games being played will lead people to pay off their cards and stop doing business with these financial charlatans
About the Bounced Checks
Unforutunately, with all the online checking and forgetting to figure in automatic debiting, there have been an occasion here or there of cascading overdrafts. One time I tried to pay off a balance on my Citibank card at their Web site. It was very confusing so much so, I could not notice which checking account the money was drawn so it was drawn off Bank A instead of Bank B. That left cascading overdrafts.
Wonder if the new overdraft criteria covers historical overdraft activities.
credit
The catch 22 of credit is still around those who don't need it have offers out the yazoo. those who need credit don't qualify and those with no credit, good or bad, don't know how to get it. I had little or bad crdit once but after getting added to my wife's card they started sending me offers. I used each card responsibly paying off charges in full every month. Then I got a Business card for my painting company , i assume because my pesonal credit was good they doubled my limits for the business cards. Now I have over $50,000 in available credit. Which is totally useless because I never carry a balance. I am currently getting cards with cashback offers for signup and no annual fees, I have already used airline mile cards to get multiple tickets to hawaii then i cancel them before the annual fee hits. Delta, continental and american all have deals, of course the card companies make money off the average user, but if they didnt there wouldnt be such great deals for me to take advantage of. There is a great article discussing some of this at http://www.bankrate.com/brm/news/cc/20080604-credit-card-exclusive-a1.asp
About time for this
I got the hassle on a home loan application because of a "thin" credit file but a fair to good FICO score. It doesn't make sense to me to take out a bunch of credit cards and loans so I can go deeper into debt and wind up defaulting on something. Also as Bruce, Have tons of disposable income. Budget simplicity is a key to staying on top of my monthly obligations.
About time!!!!
This is way past due. My credit score sucks because I have no "credit history" but I have a ton of disposable income. But they'd love to load to the guy whose bugdet has no room for error.
