I’m certainly not being cynical to say that teachers have been doing that for a long time. I remember when my kids were in school it was bad for the teachers paycheck if they allowed the low achievers to drag down the class average. Grade inflation is not a fallacy.
For decades we have paid cash for most of our purchases.
This responsible managing of our finances has, fairly recently, given us a “immature” credit history that makes us a higher “risk” to somehow…maybe…be more likely to make a loss claim in the future, or at least that is what the insurance agent seemed to be trying to explain in regards as to why our auto rates were now higher than before.
It all sounded prrreetty scammy to the wife…and me. The AllColony agent looked uncomfortable during the whole ackward moment.
Funny thing too, even though we don’t have a credit card, which I guess is now not in our best interest (financially), the agent always takes our cash payment.
What is their not to understand about paying back you debts? What is their not to understand when reading you billing statement that their is a due date. What is their not to understand about not spending more than you make? Credit is not for people who do not understand these things.
Intelligence is not handed out equally, obviously. Some people don’t understand their credit reports or their credit scores. Many people don’t really understand how debt and financing work. Sad but true… some schools don’t even offer a home economics course any more, let alone require students to take it.
I can easily see how studies show that so many people don’t ‘get it’.
Some people grow up with parents who live in fine homes and drive luxury cars but own none of it because everything is financed to the hilt. They may not understand that their upbringing isn’t the ‘norm’.
My son has several friends who come from families just like that. He has asked us before why we don’t have an Escalade or live in a certain neighborhood and my husband and I have explained to him that while our jobs are on par with his friends’ parents, we don’t like the insecure feeling that comes with financing so many things.
Thanks to “No Child Left Behind” we can expect a whole new generation of under-educated people entering adulthood and the workforce soon.
If you’re frustrated with others’ lack of understanding now, I hate to tell you there’s great potential for it to get much worse.
Unfortunately so much of what we do any more is affected by our credit history. Not just the dreaded credit scoring for insurance, these scores affect your ability to get a job, get a house, get credit cards, get an apartment and probably any other number of things I don’t know about. Most people don’t pay attention to this score and the reality is that it’s affecting so much that they do. Education is seriously needed at all levels.
While credit may be a factor in making many educated decisions I have found in my business (where I deal with credit reports everyday) it is often incorrect or at best misleading. A person who shys away from credit cards, only has a few, and rarely uses them. A person who does not have a car loan and a boat loan, and a motorcycle loan. A guy who does not pay debts with merchants (often Dr’s offices) where he has a legit dispute as to the charge. That person will often score lower than the guy who sends back every card offer he gets. He is the one who gets the max credit on every card, then over uses it. He finances everything until his monthly vig is 70 to 80% of his income. Then he makes his payments on time until he looses his job for one month. That guy will have a good score up to the point that he goes bankrupt. And we wonder why foreclosure rates are so high!!!!!!!!!!
It’s not enough to know that you pay off your debts and on time. For example, assume you have two credit cards each with a $5000 limit and a $4000 balance. One is at 18%APR and the other at 10%APR. Many people trying to improve their FICO would pay off the 18% card in full (paying minimums on the other card) and then close it so they have less available credit. The problem is that by closing the second card, the ratio of debt to available credit jumps and as a result worsens your score. Better to keep the second card and not use it. Not fair, but that’s how it works.
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I’m certainly not being cynical to say that teachers have been doing that for a long time. I remember when my kids were in school it was bad for the teachers paycheck if they allowed the low achievers to drag down the class average. Grade inflation is not a fallacy.
Like credit scoring or not, this article is the first to come close to explaining some of the major factors impacting a score
> Late Payments
> Outstanding Debt to Line of Credit
> New Lines of Credit
I agree that this is something that the public ought to know!
For decades we have paid cash for most of our purchases.
This responsible managing of our finances has, fairly recently, given us a “immature” credit history that makes us a higher “risk” to somehow…maybe…be more likely to make a loss claim in the future, or at least that is what the insurance agent seemed to be trying to explain in regards as to why our auto rates were now higher than before.
It all sounded prrreetty scammy to the wife…and me. The AllColony agent looked uncomfortable during the whole ackward moment.
Funny thing too, even though we don’t have a credit card, which I guess is now not in our best interest (financially), the agent always takes our cash payment.
Hmmm…
I agree DWT. This is stuff they should be teaching in middle school Jr. High! When young kids are getting out into the work force.
What is their not to understand about paying back you debts? What is their not to understand when reading you billing statement that their is a due date. What is their not to understand about not spending more than you make? Credit is not for people who do not understand these things.
HawaiiDuke,
Intelligence is not handed out equally, obviously. Some people don’t understand their credit reports or their credit scores. Many people don’t really understand how debt and financing work. Sad but true… some schools don’t even offer a home economics course any more, let alone require students to take it.
I can easily see how studies show that so many people don’t ‘get it’.
Some people grow up with parents who live in fine homes and drive luxury cars but own none of it because everything is financed to the hilt. They may not understand that their upbringing isn’t the ‘norm’.
My son has several friends who come from families just like that. He has asked us before why we don’t have an Escalade or live in a certain neighborhood and my husband and I have explained to him that while our jobs are on par with his friends’ parents, we don’t like the insecure feeling that comes with financing so many things.
Thanks to “No Child Left Behind” we can expect a whole new generation of under-educated people entering adulthood and the workforce soon.
If you’re frustrated with others’ lack of understanding now, I hate to tell you there’s great potential for it to get much worse.
Unfortunately so much of what we do any more is affected by our credit history. Not just the dreaded credit scoring for insurance, these scores affect your ability to get a job, get a house, get credit cards, get an apartment and probably any other number of things I don’t know about. Most people don’t pay attention to this score and the reality is that it’s affecting so much that they do. Education is seriously needed at all levels.
They are about the only ones who dont use credit scoring these days. Im trying to change that though.
While credit may be a factor in making many educated decisions I have found in my business (where I deal with credit reports everyday) it is often incorrect or at best misleading. A person who shys away from credit cards, only has a few, and rarely uses them. A person who does not have a car loan and a boat loan, and a motorcycle loan. A guy who does not pay debts with merchants (often Dr’s offices) where he has a legit dispute as to the charge. That person will often score lower than the guy who sends back every card offer he gets. He is the one who gets the max credit on every card, then over uses it. He finances everything until his monthly vig is 70 to 80% of his income. Then he makes his payments on time until he looses his job for one month. That guy will have a good score up to the point that he goes bankrupt. And we wonder why foreclosure rates are so high!!!!!!!!!!
It’s not enough to know that you pay off your debts and on time. For example, assume you have two credit cards each with a $5000 limit and a $4000 balance. One is at 18%APR and the other at 10%APR. Many people trying to improve their FICO would pay off the 18% card in full (paying minimums on the other card) and then close it so they have less available credit. The problem is that by closing the second card, the ratio of debt to available credit jumps and as a result worsens your score. Better to keep the second card and not use it. Not fair, but that’s how it works.