🚀 go-pugleaf

invalid@notreal.none (Beachcomber) writes:
>>Screwed up your mortgage? Made all the wrong choices? You lucky real 
>>estate investor, you STILL made the right choice! Thanks to recent 
>>federal Debt Relief Legislation, by just walking away from your 
>>overpriced speculative loser property and your lender, your credit can 
>>recover faster than you can say "Bankruptcy? What's that?"
>
>Personally I think its wrong that Americans allow  private companies
>(the credit reporting agencies) keep secret  files

Secret?  You can pay these agencies to get a complete copy of your
credit report any time you want.  All of them are legally obligated by
Federal law to give you a free copy every year, and there are various
situations in which they would be legally obligated to give you a copy
more frequently than that.  Not only will they give you a complete
copy of your credit report, they'll also, for little and often no
money, tell you what your FICO score is and even tell you specifically
what you can do to improve it.

>on citizens that
>determine whether they are "credit worthy or not" and largely
>determine what they will pay in interest charges for credit cards,
>mortgages, etc.

Your credit file does not determine what interest you pay; your
FINANCIAL HEALTH determines what interest you pay.  The information in
your credit file is used to determine your financial health, but that
information is driven by your own behavior and financial circumstances;
it doesn't appear there like magic.  And if there are mistakes, you
are legally entitled to correct them.

People who are better risks get better interest rates.  It's really
that simple.  It makes perfect sense.

>What if you walked into a grocery store that charged high or low
>prices for the same item dependant upon the the race or gender of the
>person making the purchase? Nobody would put up with that...

You seem to have gone off on a tangent here, because there's nothing
about race in credit files, and sex is not a factor in your FICO score.
While it's certainly true that some lenders discriminate based on race,
and who knows perhaps some also discriminate based on sex (although I
don't recall hearing anything specific about that), this really has
nothing to do with your credit file, and it's ILLEGAL to boot.

>The credit issuing companies are perfectly right in denying each
>applicant credit or not, but if credit is granted...  Everyone should
>pay whatever market rate is in effect at the time.

No.  The credit issuing companies are perfectly right to charge higher
interest rates to people who are higher risks, because a larger
percentage of those people are going to default on their debts, and the
interest the companies earn from the other borrowers in those risk
pools needs to make up for the losses.

Furthermore, purely from the point of view of supply and demand,
lower-risk borrowers are more attractive to lenders, and therefore
lenders have to compete to earn their business by offering them lower
rates.

This is simple, straightforward capitalism.  There's nothing illogical
or unethical about it.

>It makes no sense to declare someone a deadbeat and then say "for you,
>you get a 9%, 10%, or 15% mortgage when every else is paying 5 1/2%
>or, we will start you at a low rate for a year, but after that, you
>are going to pay bonzo big bucks at twice or three times the market
>rate.

People aren't "declared" deadbeats by the credit agencies.  Their own
actions earn that status for them.  No one has the "right" to spend
more than they earn; it is a privilege that a person earns by proving
that s/he is a safe enough borrower that lenders will want to lend him
or her money.  If a person doesn't like the interest rates being
offered, then s/he doesn't have to borrow money.

And please spare me the canard about how it's a Catch-22 because you
can't fix a bad credit rating without being able to borrow money,
because it isn't true.  Even the worst deadbeats can get credit cards,
and it doesn't matter if the cards have an obscene interest rate,
because if you spend money on the card every month and then pay it off
at the end of the month without paying a penny of interest, that does
wonders for your credit rating.

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