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Credit Scores And The Boogie Man

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posted on Jul, 8 2012 @ 01:07 AM
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Who all here has had their credit score shot all to hell and back during this recession? If you don’t want to come right out and say so...tell me about your “friend”.


I realize that there are plenty of folks who have remained unscathed...but in my life, most of them have been hit pretty hard.

My husband’s salary was small to begin with topping out at around $52,000 a year. Really decent money for my area. Enough money that I was able to stay at home and we were comfortable. We paid our bills on time. The only loans we had were for 2 vehicles and a mortgage. We did have 3 credit cards as well as out utilities. Water, Electricity, Telephones, etc. One day out of the blue my husband’s salary is cut to less than $25,000 a year. In one fell swoop we lost over half of our original take home pay. With the recession, came the need for a lot less lumber to build houses that weren’t selling. It was either shut their saw mill down...or take the cut.

So we weren’t “living above our means” or partying like rock stars and thus unable to pay debts as easily as before. We were just like so many other people struggling to do what we could do.

We continued to struggle to pay the bills, and although we did pay them, some of them were late enough to be reported to the credit agencies. Our previously “excellent” credit rating has fallen in a hole so deep that Jimmy Hoffa will probably find it before we can correct it.

On some levels I am ok with this. Not being able to borrow money will save us from creating future debts and will force us to pay cash instead...This in my mind is a good thing. On the other hand, you never know if something catastrophic will occur where you will need to take a loan for something.

Dealing with this, I started thinking. (I know it’s dangerous) Most of us were taught that your credit score is gold. We are told to do whatever we can to keep that score as high as possible. And most of us do try really hard to do this without ever thinking about it.

Stick with me here, I am getting to it.

I am left wondering if there aren’t a few things going on here.

When you pay your bills and they are slightly over due, there are generally late fees involved. The banks/credit card companies take in a ton of money from these late fees and will hike up your interest rates to boot. So in essence, they are winning twice.

Also, when your score does take a hit, a lot of banks will still loan at unbelievable interest rates, so again...they are winning twice.

I understand they lent you the money and you should pay on time every single time, but hardships happen to all of us at one time or another. I am just saying that I don’t think they mind when stuff like this happens because it means more money in their pockets.

Now, I am not saying that the recession was started on purpose for THIS purpose, but it gives one something to think about. Who is benefitting in this recession? Who is still making a profit?

My score at this point is probably so bad that the bank will be knocking on my door to repo the free calendar they gave me.


I am curious to see if anyone else has thought of this? Is it really an outlandish idea?

I am thinking about updating my resume to include this...



Times are tight for a lot of us.
edit on 7/8/2012 by Kangaruex4Ewe because: (no reason given)




posted on Jul, 8 2012 @ 01:47 AM
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Seems they want to keep people in debt, but it's mostly likely the banks can make some extra money on the way to the grand scheme being accomplished.

I really don't think the banks care if you make regular credit card payments, as long as you are making them money. They need you more than you need them. They used to be strict but aren't anymore.



posted on Jul, 8 2012 @ 01:49 AM
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My credit rating is uglier than the fat girl that was rolled in flour for the wet spot to soak through!

I know your pain.



posted on Jul, 8 2012 @ 02:03 AM
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So yes I agree with you in part that banks are in it for the interest profits, but I don't think it was the main plan. I think it's part of having it get so bad they can start repossessing property etc and that's where the real problem will be, when you have no control over your life whatsoever, being at their mercy.



posted on Jul, 8 2012 @ 02:38 AM
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reply to post by Kangaruex4Ewe
 


I am of the opinion that this is all planned. Call me crazy.
I suggest disposing of unsecured debt.......of course........this really is a good way to go......don't let anyone try to fool you.



posted on Jul, 8 2012 @ 02:57 AM
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reply to post by Kangaruex4Ewe
 


Credit scores are analogous to statistics. They can be interpreted in a number of ways. As for what those numbers means to a bank differs from one bank to another.
4-5 years ago I was downsized from a fortune 500 company. I was making very good money and doing quite well. Then suddenly, it was all gone. On a personal note, You can never save enough for that scenario. Long story short, I called the bank and talk to the president of the bank and told him that my funds were running out and it wouldn’t be long before I was unable to make the mortgage payment. I then asked for any viable options. He said “ Don’t worry about it just send what you can “. So I did anything I could to make money. I worked at McDonalds and collected scrap and did some free lance graphical stuff. Every cent I could get went straight to the bank, minus the $3.00 a day food allowance of course. It was almost 9 months before I found a good tangible job that paid good money. At that point I was 6 months behind on my mortgage. It took nearly a year before I finally got it caught up. Since then the mortgage payment is always sent early.
Then about a month ago, my car broke down and I needed another car. I went to a car lot picked one out and applied for the loan. It was rejected. So, I figured it was because of being behind on my mortgage for that long. So, I called my bank and talked to the president and asked if there was any chance I could get a loan. Without hesitation he said “ Sure!!, how much and who do I make the check out to”. I was really dumbfounded and nearly in shock as that was not the answer I was expecting.
He then told me that the banks like people who communicate with them. He then said that I communicated well with them and that in itself merited credit. So basically he gave me the loan based on my character Not credit score. Though I did ask him to run a credit report so I could see what was on it. The score was 699, which is not too hateful. There was only one item on there, which was my mortgage and the number of months it was behind.
So, one bank looks at it and one bank doesn’t. I say, get to know your local neighborhood bank president and communicate regularly with him.
As far as the late fees, both banks and businesses don’t mind you bouncing checks, and paying your bills late. After all who complains about free income. Although, reporting it on your credit score, is just an unpleasant byproduct.



posted on Jul, 8 2012 @ 05:28 AM
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reply to post by Kangaruex4Ewe
 


"My husband’s salary was small to begin with topping out at around $52,000 a year. Really decent money for my area. Enough money that I was able to stay at home and we were comfortable. We paid our bills on time. The only loans we had were for 2 vehicles and a mortgage. We did have 3 credit cards as well as out utilities. Water, Electricity, Telephones, etc. One day out of the blue my husband’s salary is cut to less than $25,000 a year. In one fell swoop we lost over half of our original take home pay. With the recession, came the need for a lot less lumber to build houses that weren’t selling. It was either shut their saw mill down...or take the cut.

So we weren’t “living above our means” or partying like rock stars and thus unable to pay debts as easily as before. We were just like so many other people struggling to do what we could do."

Right.So you were living beyond your means on one salary.So it's got to be the banks fault! Really,that's what you're saying here.Lose the credit cards. And also,your husbands salary didn't get cut to that much for no reason.You want us to believe it did.And $52,000 isnt a small salary these days. If you worked you'd probably easily double that.




posted on Jul, 8 2012 @ 05:32 AM
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Originally posted by violet
Seems they want to keep people in debt, but it's mostly likely the banks can make some extra money on the way to the grand scheme being accomplished.

I really don't think the banks care if you make regular credit card payments, as long as you are making them money. They need you more than you need them. They used to be strict but aren't anymore.



Right! It's them that want to keep people in debt!! It couldn't be that you people can't be responsible!

No,it's always some one else's fault!



posted on Jul, 8 2012 @ 09:48 AM
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Originally posted by nightstalker78
reply to post by Kangaruex4Ewe
 


"My husband’s salary was small to begin with topping out at around $52,000 a year. Really decent money for my area. Enough money that I was able to stay at home and we were comfortable. We paid our bills on time. The only loans we had were for 2 vehicles and a mortgage. We did have 3 credit cards as well as out utilities. Water, Electricity, Telephones, etc. One day out of the blue my husband’s salary is cut to less than $25,000 a year. In one fell swoop we lost over half of our original take home pay. With the recession, came the need for a lot less lumber to build houses that weren’t selling. It was either shut their saw mill down...or take the cut.

So we weren’t “living above our means” or partying like rock stars and thus unable to pay debts as easily as before. We were just like so many other people struggling to do what we could do."

Right.So you were living beyond your means on one salary.So it's got to be the banks fault! Really,that's what you're saying here.Lose the credit cards. And also,your husbands salary didn't get cut to that much for no reason.You want us to believe it did.And $52,000 isnt a small salary these days. If you worked you'd probably easily double that.



I don't recall blaming the banks for my situation. The credit cards have since been paid off. We are paying our bills currently easier than we were when the recession first hit.

And I am slightly offended that you claim there is no way he took that kind of pay cut. Have you ever worked a piece rate job? Have you ever had a job that gave bonuses? They paid bonuses for per foot production on the lumber monthly. When hard times hit...the bonus was the first thing to go. You can choose to believe it or not, but flat out calling me a liar is a bit over the top.

I also said $52,000 was decent money for my area. It's small change in other places. Again, I never blamed the bank.I brought up the question about things being manipulated in the economy so the banks could turn a bigger profit. When we bought our house, I wasn't deaf, dumb, and mute. I knew the terms and agreed to pay the payment plus any fees. That doesn't mean that I can't wonder if there is a bigger agenda at times.



posted on Jul, 8 2012 @ 09:54 AM
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Originally posted by Petriclivicus
reply to post by Kangaruex4Ewe
 


Credit scores are analogous to statistics. They can be interpreted in a number of ways. As for what those numbers means to a bank differs from one bank to another.
4-5 years ago I was downsized from a fortune 500 company. I was making very good money and doing quite well. Then suddenly, it was all gone. On a personal note, You can never save enough for that scenario. Long story short, I called the bank and talk to the president of the bank and told him that my funds were running out and it wouldn’t be long before I was unable to make the mortgage payment. I then asked for any viable options. He said “ Don’t worry about it just send what you can “. So I did anything I could to make money. I worked at McDonalds and collected scrap and did some free lance graphical stuff. Every cent I could get went straight to the bank, minus the $3.00 a day food allowance of course. It was almost 9 months before I found a good tangible job that paid good money. At that point I was 6 months behind on my mortgage. It took nearly a year before I finally got it caught up. Since then the mortgage payment is always sent early.
Then about a month ago, my car broke down and I needed another car. I went to a car lot picked one out and applied for the loan. It was rejected. So, I figured it was because of being behind on my mortgage for that long. So, I called my bank and talked to the president and asked if there was any chance I could get a loan. Without hesitation he said “ Sure!!, how much and who do I make the check out to”. I was really dumbfounded and nearly in shock as that was not the answer I was expecting.
He then told me that the banks like people who communicate with them. He then said that I communicated well with them and that in itself merited credit. So basically he gave me the loan based on my character Not credit score. Though I did ask him to run a credit report so I could see what was on it. The score was 699, which is not too hateful. There was only one item on there, which was my mortgage and the number of months it was behind.
So, one bank looks at it and one bank doesn’t. I say, get to know your local neighborhood bank president and communicate regularly with him.
As far as the late fees, both banks and businesses don’t mind you bouncing checks, and paying your bills late. After all who complains about free income. Although, reporting it on your credit score, is just an unpleasant byproduct.


The communication is a good thing. I agree. Most places are willing to work with you if you just pick up the phone and let them know what is going on. It's when you dodge them all together that they get a little nasty I think. We stayed current on the mortgage through that time, and communicated with the car loan companies and they worked with us very well. For that I was thankful! I hope I never have to take out another loan, but if I do, I will take your advice. We have managed to pay off some debts since this happened and are more comfortable with living expenses because of it.

I am glad you got through it too. You never know when hard times are going to hit, and like you said...those savings go fast when you are living off of them!



posted on Jul, 8 2012 @ 09:57 AM
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reply to post by Kangaruex4Ewe



Is it really an outlandish idea?

 


the concept of paying cash, ,,,what a concept indeed



posted on Jul, 8 2012 @ 10:05 AM
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Originally posted by rebellender
reply to post by Kangaruex4Ewe



Is it really an outlandish idea?

 


the concept of paying cash, ,,,what a concept indeed


I can concede that a lesson has been learned on that. I think most of us have had to learn that it might take longer to get something with cash...but owning it flat out is always the better deal.



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