Slashdot Mirror
Should Social Media Affect Your Creditworthiness?
theodp writes "Betabeat's Adrianne Jeffries takes a look at the questionable young science of using social media to evaluate creditworthiness. As banks start nosing around Facebook and Twitter, Jeffries explains, the wrong friends might just sink your credit. 'Let's take a trip with the Ghost of Christmas Future,' she suggests. 'The year is 2016, and George Bailey, a former banker, now a part-time consultant, is looking for a 30-year fixed-rate mortgage for a co-op in the super-hot neighborhood of Bedford Falls (BeFa). He has never missed a loan payment and has zero credit card debt. He submits his information to the online-only PotterBank.com, but halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn. The cartoon loan officer avatar begins to frown as the algorithm discovers Mr. Bailey's taxi-driving buddy Ernie was once turned down by PotterBank for a loan; then it starts browsing his daughter Zuzu's photo album, 'Saturday Nite!' And what was this tweet from a few years back: "FML, about to jump off a goddamn bridge"?' So, could George piggyback his way to a better credit score by adding Larry and Sergey to his Google+ Circles?"
C'mon, slashdot.... Is this news ? Does this matter ? Slow news day ?
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
And in the EU there are data protection and privacy laws that could be used to deter this kind of thing.
At least George has Clarence as an angel investor.
Oh, yeah, it's not easy to pad these out to 120 characters.
Everybody that uses social networks have connections to somebody that gone broke, or made bad comments on the past. That fictional bank wouldn't be able to lend money. Thus wouldn't generate any revenue.
Searching social networks will probably happen on the real world, but you can bet the information the banks will gather will be way saner than that, and they won't jump to conclusion that fast.
Now, about the real problem. Why is everybody so concerned about their credit worthness?
Rethinking email
I Wonder what if you don't actually have any of those accounts. For me I don't have twitter or linkedin accout at all.
I mean, after all, you're borrowing their money. You don't have a right to it.
"halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn." If any site of a supposed financial institution were to start asking for my logins for any site other than it's own, frankly I would run from that site like the plague.
...as long as not using social media does not affect my credit worthiness.
Slashdot is so lam, the site sole purpose has become to trick people to visit rogue sites. And lets mention those stupid polls; how they gather information for the police. "How many drives do you have?", "where is your favourite hiding spot?", "Do you ever write your password down?", "Do you encrypt your drive?". Welcome to the new world order, you are guilty and you will be punished.
Couldn't be much worse than S&P and Moody's evaluation of subprime (aka supershit let the 99% die) AAA rated debt.
http://www.bloomberg.com/news/2011-08-31/subprime-mortgage-bonds-getting-aaa-rating-s-p-denies-to-u-s-treasuries.html
blindly antisocialist = antisocial
The company iZettle, which provides "personal payment" via credit cards (chip reader that plugs into phone+app),
requires not only traditional autentication and a bank account - but also your facebook profile with an established social network. I.e. you must have friends as a voucher for your identity.
No facebook, no service. True, they dont base credit reports on your profile, but I find it a disturbing development where traditional identification and bank account are not enough (especially here in Sweden where we already are tracked since birth with the personnummer supercookie).
This isn't going to be particularly pleasant to hear, but ultimately these sorts of activities are all about finding indicators of your likeliness to default on your credit, in much the same way that indicators are used when providing insurance to evaluate someone's likelihood of needing to make a claim and price them accordingly. So having these extra indicators isn't by itself necessarily bad. It's not in the lender's interests to come up with bad indicators. To stay competitive, they have to strike a good balance between covering their ass and giving you a better rate than the next lender. So ultimately they're trying to find out something about your creditworthiness (as a probabilistic measure of default) that is more likely to be right than wrong.
The real philosophical issue is, if non-financial indicators are used to evaluate our creditworthiness, then are we being unfairly induced to make changes to our lifestyle to accomodate our need for credit?
No kidding!!! What do you say at this point?
Maybe not, but they could offer incentives like a lower rate if you provide a good social profile.
These comments are my personal opinions and do not necessarily reflect the opinions of the other voices in my head.
Depend on what you put in a public way. From the start in G+ you had circles to choose with who share some things, so giving your id to a bank, unless you put it in your Friends circle, won't disclose anything that you didnt made public. I think that Facebook and Twitter enable to restrict the audience of some posts, but could remain plenty of old public things (and, of course, there is the problem of resharing somewhat private things)
The problem with Larry and Sergei is not G+, is plain google (or any other search engine). If you posted with your name or known email something public (or made public) long ago, it could be found and (mis)used against you in the future.
...by having multiple accounts for these sorts of things
They've dressed the issue up as something hypothetical, when in fact it already happens. It's just not banks that are doing it
Insurance companies are infamously snoopy and manipulative. They'll look at anything and everything they can possibly get their hands on, legal or not, to analyze your risks. I'd bet serious money that insurers already pry in social networks.
And they've managed acts of regulatory capture that would make even banks and defense contractors blush. Here in North Carolina you're not even allowed to have a driver's license unless you have car insurance. If you don't actually have a car that's tough shit; you can't even drive rentals or borrowed cars.
Just like car insurance, you can get a lower rate if you put their little black box in your car to let them record your driving style and locations. Living privately in the future is gonna be bloody expensive, I gotta get a better paying job and save up...
"When information is power, privacy is freedom" - Jah-Wren Ryel
Please mod me up, I want to refinance!
org.slashdot.post.SignatureNotFoundException: ewg
Credit ratings as currently implemented are wild guesses and are basically weapons against you that you are to supply the munitions for. If you have had credit (and paid interest on it) you have a better credit rating than by financing things from your savings, not spending on interest, for one. And it goes on. Take an objective look and notice just how much you are the product. The problem is of the same "approached from a wrong angle" systemic nature as why credit rating agencies are currently in hot water for mis-assessing banks and cdos and whatnots, even entire countries, contributing to lots of banking troubles, except you the assessed have far, far less market power to do anything about it.
So, no, more data sources is not necessarily going to improve the ratings, rather unlikely even. Killing off the rating agencies and starting over has a better chance of alleviating the misery.
Frankly, I think Social media sites should not be used to judge someone for credit worthiness, or for jobs or for marking someone's abilities to perform work. People have lives that are not always accurately reflected from social media sites.
People do things in there personal time that is there personal time. This should not be used against you.
Conversely, people who don't post on social media sites should not be scrutinized either for their lack of personal info on the Web.
Credit worthiness is based on one's abilities to pay their debts incurred. Credit rating companies already provide this info.
While I think the way Credit agencies horde data on an individual is appalling, it does have the ability to show patterns in people and their spending.
Life takes interesting turns, but the most interest is when you're off the beaten path.
Dear bank, sorry, I can't give you the login directly, privacy you know. But (wink, wink) you can find them - just Google for my nickname "Anonymous"...
Enjoy life! This is not a dress rehearsal.
You give it your professional ones not your personal ones.
Honestly what idiot is posting everything professional and private to the same profile?
Do not look at laser with remaining good eye.
If you have a credit history, the bank is going to use that to determine whether to give you a loan or not. Paid off all your debts? Make more money than you spend? Never had a late payment? Banks will be falling over themselves to lend you money. Defaulted on everything? Bankruptcy? You're going to have some high interest rates.
What I see here is a tool banks and credit unions could potentially use to inform them about people without a credit score. Maybe I haven't had a credit card or mortgage before, but the fact is that I have a good work ethic and deep sense of integrity about paying of my debts... up till now, a lending institution has very little way of differentiating me from the kid who doesn't understand credit and thinks it's free money.
Now, if the institution can check my interests, and simple, potentially-significant measures like my quantity of friends or how many people like my updates, they may be able to determine whether I'm a safer risk. If they do, it's better for me.
I know it's kind of a devil's bargain -- give them the ability to look at private info for a reasonable, helpful purpose and next thing they'll be making bad decisions based on it... I would never consider letting a faceless megacorp like BofA or Wells Fargo look at it. But my bank has 2 branches, and everybody there knows my name... some of them could legitimately be my real facebook friends. I don't have a problem sharing my social networking info with them. It has the potential to be a win-win with better rates for me and lower risk for my bank.
Sounds like a plan, so we live in a cardboard box until we can save the $60,000 to buy a crack house in the hood?
Renting is the same as credit. so I cant rent.
Do not look at laser with remaining good eye.
From TFA:
in 2009 a woman in Quebec stopped receiving disability payments for major depression after Manulife decided, based on beach vacation photos on Facebook, that she seemed happy enough to work after all.
There's no mention of any further investigation, but this sounds like jumping to conclusions to me.
Well, it depends on what she told the insurance company. Major depression is a massive brain malfunction, the kind where many sufferers can't even get up out of bed for hours or days at a time, and not because they feel so miserable that they don't want to; they actually can't get up. Even major depressives can have good days, but if she told them she had catatonic major depression and never left the house (which would be plausible), and they saw recent photos of a smiling beach vacation, that would be a very serious contradiction to her story and the pathology of her illness.
So denying that claim based on photos is harsh, but possibly tenable.
The second this takes off, there's going to be a business in optimizing people's social profiles - if nothing else, the things you should have/not have on your profile will spread through word of mouth and experience. The reason facebook et al is used for evaluating people is the idea that people might not "keep up appearances" there, right? But if it impacts your personal finances or job prospects most people would just tighten up out of fear. It's self-defeating. It's also dreadful since it'd presumably lead to people making themselves out to be oily cookie-cutter smilies for financial benefit, conformity of the worst kind.
Emotions! In your brain!
Worse, what verification could possibly be carried out that the Facebook/Twatter/whatever account is actually associated with the person in question? My name isn't anywhere nearly as common as "John Smith", but if I do a casual search for Facebook accounts with my name, I get 8 (approximate) hits. Who's to say that someone else can't poison my reputation, despite the fact that I do not have a Facebook account?
Renting is actually worse than credit. When you make a purchase on credit you just pay interest on an advance of a sum of money that's quite large compared to the interest. When you rent, you pay a lot of money every month and when you're done renting, the property owner STILL HAS THE HOUSE in better condition than it would be if it were left vacant, in addition to a huge sum of money that you paid over the years! That's how the rich get richer!
"When information is power, privacy is freedom" - Jah-Wren Ryel
Inorite?
I didn't think much of "What's your favorite color?" or even "What's your favorite brand of pop?".
But then, out of nowhere it was all "If you *did* have a dead body to hide... where would you put it?"
I probably should have lied on that one...
Absolutely not. I'll tell you why: There is currently no way to verify who you say you are on social networks, hell, some of them you can sign up with a fake, made-up name... all you need is a valid email address which can be anything. Oh, and that email address can be webmail, which also does not attempt to verify your identity. This makes it incredibly easy to set up fake accounts or profiles in someone else's name.
Absolutely NONE of these services have a way to accurately verify your identity. They don't even try for the most part. This alone means that searching for Bob Smith's facebook page does not guarantee that I find the real Bob Smith's facebook page. Or that anything posted or linked to Bob's profile has any accuracy whatsoever.
Stuff can become attached or linked to your social media profile, even without your knowledge. Character assassination anyone? Someone you know (or even don't know) can take a picture, post it online and tag it with your name, and there is absolutely no way to verify who is in the picture. I can take a picture of my cat taking a dump and post it, tag it with a friends name, and this will then get linked to their profile.
Do you see the problem with this? If a prospective employer or a credit service wants to search for my name on social media sites fine, but I expect they will be smart about actually using unverifiable information to determine my credit or job worthiness. The mere act that they would use unverifiable data to back up a decision on something important like a job position or a credit score, tells a lot about the company. Luckily I live in the EU where this sort of thing is not widespread and we actually have strong personal data protection laws.
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In general, you are right but it is not so simple. You have to factor in a lot of things like maintenance, property taxes, liability into the picture before you decide whether it is better to rent or buy. One big things people forget about is the transaction cost of buying and selling. This can be a significant portion of your cash outlays. Say you put a down payment of $20,000 on a $200,000 house. Brokerage and closing costs can be around $15,000 or higher. If you don't intend to live in a house more than a few years youmay just be better off renting.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
One constant of humanity is their ever willingness to look for any metric with which to divide themselves into lessers and greaters.
I am John Hurt.
After all, Facebook is already selling that info.
You providing your profile information for free is probably a Facebook TOS violation.
I am very small, utmostly microscopic.
So denying that claim based on photos is harsh, but possibly tenable.
Using the photos as a basis for further investigation is tenable, relying on the photos as the only evidence is jumping to conclusions. I never said it was the wrong conclusion, but it is effectively making a choice with little and incomplete information. Much like we don't know what she told Manulife about her illness, Manulife also don't know the circumstances surrounding the reason she was at the beach. There are many beaches in Quebec, for all we know, this could have been in her back yard on one of her good days.
"but halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn."
This seems like a fair data point for determining credit risk. Anyone stupid enough to actually enter this information is definitely a credit risk! The same goes for employers or potential employers who are starting to ask for this; if you are dumb enough to give them login credentials to your accounts then you are a security risk.
As for the rest of the article, I don't think the information on your social media sites is the least bit reliable for determining credit risk so financial institutions should not be using it.
is available usually very cheaply. That would meet the insurance requirement.
...or just do what every other fucking sheep does and get a loan.
Operation Guillotine is in effect.
Unless your fiend is cosigning a loan, banks aren't going to care about them.
Banks only care about your ability to repay loans. They get the best data from your credit and employment history.
If banks are going to use social media, they will only look at your personal profile and it will be an insignificant factor in judging your credit worthiness. It is easy to fake a clean Facebook profile but hard to fake a credit score. Use some common sense.
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Actually, renting is better than credit in the sense that the landlord is still responsible for structural maintenance. This can easily offset the income from rent if say, the windows needed replacing, or the place needed a full rewire or gas central heating system - even a new combi gas boiler can put quite a dent in someone's pocket. I'd rather that someone wasn't me.
Operation Guillotine is in effect.
So, the end of the summary questions about adding prominent google people to your google+ circles. How would this change anything if it is looking at your facebook/twitter/linkedin... I also wonder why you would put in your facebook or twitter info unless it forces you to.
Comment removed based on user account deletion
Quick, someone look up Kevin Bacon's credit score!
There's nothing inherently wrong with that as long as you are actually going to be able to pay it back.
To offset political mods, replace Flamebait with Insightful.
ability has less to do with it than intent these days.
Operation Guillotine is in effect.
People that bought a home in 2005-2008 now have a $250,000 loan on a $80,000 home. Buying is not always a net gain, many times it's a net loss. or at most a break even.
Do not look at laser with remaining good eye.
I have never seen a landlord do anything to a home other than the absolute minimum... windows need replacing? sucks to be you. live with the drafty windows.
Do not look at laser with remaining good eye.
in which case you withhold the rent - put it in an escrow account, releasing it only upon completion of the repairs.
Completely legal in the UK, and there's fuck all the landlord can do about it (he can't even evict you) except to fix the problem.
Operation Guillotine is in effect.
Mine checked my score, got a copy of some of my last few credit stubs, and my letter of employment from when I took my position permanently. No calling my boss or anything like that.
It seems your bank is a bit more hardcore than mine (not that it's necessarily a bad thing considering all the issues with bad mortgage debt).
Not quite... only *successful* landlords who actually make money are that way. The truth is, it's way more profitable to be a slumlord than to have affluent tenants. If you're a slumlord, you can rent out a shack that costs you $400/month to own for $200/week and pocket 99% of it. If you own a nice house or condo that costs you $1,600/month (mortgage, taxes, and insurance) to own, you'll be lucky to rent it out to someone "nice" for $2,000/month. Same $400/month nominal profit. The difference is, if you're a slumlord, there's no expectation of real maintenance. If something breaks, you can tell your week-to-week tenant to take a hike if he's not happy, and give the next tenant a $10/week discount. In contrast, the hipster renting your nice condo is going to demand instant (including weekend) repairs if *anything* goes wrong. A single clogged toilet has just wiped away your profit for March. A burned-out starter capacitor in the central AC is going to wipe it away for July (the slumlord will have to fix it too unless he wants an unrentable unit, but he can take his sweet time and pay someone to fix it off the books for $60 cash instead of as a $500 weekend overtime repair job).
Lots of aspiring middle-class investors found this out the hard way after they ended up being stuck with properties they intended to flip. They went into landlord-seeing-dollar-signs mode, and quickly found out that most of the time, if you own a nice property bought at the most insane peak of the real estate boom, you'll be lucky to LOSE "only" a few hundred dollars per month per year after you've collected the rent and paid the bills. The only landlords who genuinely make real money are the slumlords who own a few dozen or hundred units in cracktown and rent them out to poor people with no credit (because it's expensive to be poor).
Sounds like someone's been goatse'd a few times on here.
You have such accounts.
What if you don't have accounts on social media like that?
Not everyone does you know.
I am Bennett Haselton! I am Bennett Haselton!
What bothers me is that they seem to be looking for ways to lower credit scores of people who have good credit scores. It seems obvious to me that this has nothing to do with borrowing and repayment, as they want to keep linking in items that are not related to borrowing and payment history or income. They made a run at using driving records to contribute to credit history, and now social networking.
Their statisticians claim these are relevant, but if they are, why doesn't borrowing and payment history represent this? Next thing you know they'll correlate hair color or something and charge more, since blondes are slow pays.
My sense is that the purpose of this is to drive down credit scores for people who have good credit histories. Why? It allows banks to charge higher interest rates or more fees those borrowers, something of a rising tide that prevents a lot of shopping around as it gets factored into a "credit score" that all lenders use.
Creditors don't do a lot of individualized underwriting anymore -- it's not like the old days where you sat in the banker's office and told him how your mortgage payment was late because Aunt Dora died and you had to travel to the funeral and didn't get it in the mail or that you were in line for a promotion which would raise your salary by 35%. Now the banker just looks at your score and makes a decision. Shopping around is pointless -- it's the same score everywhere.
IMHO, this is the biggest problem with the dependence on the credit score. A small number of organizations (2, maybe 3?) generate them and lenders use them as an objective number. The problem is that the credit score sellers see banks as their clients, and thus have an incentive to suppress scores as it increases bank profits and the value of the score to the lender. ("Use our score and make more money.")
Here is the problem as I see it. Lets say that you are credit worthy and would qualify for a loan if only your financial history was considered. Now if the credit agencies could use the data about your friends the following is plausible.
1 Lets say you list Joe blow as one of your friends.
2. Joe Blow has a very poor credit rating. In fact he has a bankruptcy on his record.
3. Joe Blow is looking for friends to loan him money (there is a chance he might not pay it back).
3 Your loan application is refused because they think that you might give money to Joe Blow and he will not repay you.
Do we really want to have our financial history dependent on people we call friends? Also the concept of a friend has been changing. Someone you list as a "friend" on FB might not be a good friend that you know on the outside world (face to face). In some respects, FB has cheapened the term "friend". We actually need a different term for someone that you occasionally meet online.
I hate to say it, because I don't like saying anything that further legitimizes generally unethical behavior (insurance scams), but in this instance there's nothing wrong with using social media as another fact-checking resource. If the goal is management of the risk accrued by your behavior in exchange for money, then those who will manage that risk have a legitimate right to ASSESS the degree of it by whatever means is available. If a person's behavior in the context of Internet social media identifies a degree of risk in the person's behavior and motives not made obvious in other contexts, then denying access to that information amounts to creation of a fraudulent contract.
If people started to be evaluated by banks by the people they associate with, even online, it would create a caste system. There really would be an untouchables class that nobody wants to associate themselves with, and there would also be a superior class that people think of as better than the common people.
You have no control of what others post. Maybe the stuff that others post about you is unflattering but doesn't rise to the level of libel (where you could sue the cretin). If deep data mining is allowed, this unflattering data might be found and put into your credit history. You might not even be aware it is out there. Had an engagement or marriage that didn't work out? Maybe your ex or dumped spouse to be is mad enough to put true but unflattering stuff online.
Not the inadequate credit worthiness determination system.
The current banking crisis, housing crisis, EU crisis, sovereign debt crisis, liquidity crisis and credit crisis were caused by crooked bankers gaming the system, not by billions of people gaming the credit application process.
This is to push you all to use your real name to get a facebook page, disclose your every detail, do self surveillance, not drink, not say or do stupid stuff, and get rid of all your hoodlum friends.
This is about a piece of Real ID to get approval to exist from the State, and a credit card/credit score from the banks to get approval to exist from the Banks.
That credit card is a piece of ID to the banking system.
Now the banking system wants to replace the church as the decider of your morality.
God watchin you all the time was just a mental construct. Cameras, facebook, no warrant wiretaps, ARE watching you all the time. They set themselves up as Gods.
All the fools that thought getting rid of church, god and religion would free them the moral tyranny of their Puritan masters.
Wrong. The Banks and the Justice System just wanted that space in your heads for themselves.
People are still telling what to do, how to live, how to think, what is right and wrong. It now just Mark Zuckerberg and Goldman Sacks. Backed by Pentagon, The Department of Justice and the Banking Cartel.
It is not just Mrs. White and here church ladies wagging their fingers at you. It is the entire weight of military, industrial, legal, banking, media complex.
But what the really evil part is? The church ladies never stop. They are never satisfied. They do not make deals. They do not compromise with evil.
"If they save only one child's life" they say.
GOT IT? These do gooders, these world improvers will not stop until they have total control and have made it is a perfect world.
Which is impossible. IF this was religion, they would be labelled as zealots. If this was mental health, we would label them as delusional and obsessive compulsive.
But wrap it in the Flag and the Children and no one dares to speak out against this sacred cow.
Such is insurance. The first part of their job is to convince you that you may need a large sum of money in the future to recover from an otherwise unforeseen cataclysm.
The second part of their job is to convince you that you are a massive risk and must pay larger fees because, let's face it, you're going to be using their services more than others.
The last part of their job is to resist paying out in the case of a cataclysm because they have proof that you were a much higher risk that you originally stated and that lack of disclosure invalidates your relationship with the insurance company. Of course, they will have known all the risks ahead of time, but if you don't state them, they'll hold it against you.
Social media sites are means for insurance companies to find these unstated risks and use them against you later. It does or will happen. Accept it. Now, change your social media habits accordingly.
When you make a purchase on credit you just pay interest on an advance of a sum of money that's quite large compared to the interest.
Uh, home loans are not like that. Consult an amortization table sometime. You usually end up paying more interest than principle, in the end.
For instance, if you get a $250k loan at 6% for 30 years, you will pay a total of $540k over the life of the loan. That's $250k of principle and $290k of interest.
Suppose the house appreciates to $375k in 30 years. So the actual cost of living there was $165k, or about $460 per month. Is that a better deal than renting? Yeah, maybe, but it's not as big a difference as you make it seem.
Switch to a credit union. They generally don't use every interaction with customers as an opportunity to bend you over and fuck you in the arse.
Depends entirely on how much you have been paying for rent.
I've done the math, and the rent I pay for the house I'm in is significantly less than the land taxes, maintenance, and interest on the house would be if I owned it. Further, if the market crashes, I don't lose any capital, because I don't have any capital invested.
The whole "Renting is worse than owning" thing is fantastically over-simplified, and over-simplification of the home ownership equation (Particularly when the houses started costing a million dollars) is one of the issues that has lead to inflated house prices.
It's been a long time.
I have a policy: If something is asking for a username and password to ANYTHING for ANY reason, I walk away. The one exception would be if the federal government was asking because I was applying for security clearance. Passwords are highly privileged information. Anyone with them can pretend to be me. Not happening.
Each and every time that you use a credit card you are going into debt.
Please try to get an understanding of the common use meaning of "a debt" vs "in debt". If you have something you need to pay, that is "a debt". When you have "a debt" that is large enough that you are currently unable to pay it, you are "in debt". If someone with a million dollars in his bank account lost his wallet and had to borrow $20 to take a cab home, he definitely has "a debt" (of $20 to whomever he borrowed from) but nobody in their right mind (except perhaps some clueless people on slashdot) would consider him to be "in debt". Being "in debt" is a state in which you are living beyond your means.
If you never incur a debt on your credit card, the bank will eventually cancel that line of credit and your credit score will go down. Try going 20 years without without any debt whatsoever (not even zero-interest debt) ... you will end up with a credit score that is mediocre to sub-prime.
Funny, I've got 2 cards from approx 2006 and 4 or 5 from 2008 that haven't been used once since. None of them have been cancelled. Credit lines were reduced when the 2008 economic crisis hit, but that was an across the board thing. Even some of my most frequently used credit cards had their credit lines cut.
My mother has a credit card that hasn't been used in at least 10 years. It hasn't been cancelled either. In addition, she hasn't had a car loan since about 1993 or 1994, and she's never had a mortgage or personal loan in her name. If you are right, then her credit should be absolute shit. Yet when I helped her switch insurance companies last year, they pulled her credit score and she was in the high 700's (anything over 720 is considered excellent). Oops, there goes your theory.
Please don't try to educate me about how credit scores work, as it's obvious you have no clue about them yourself. I'd highly recommend, if you are serious about understanding this sort of stuff, that you go spend some time on the fatwallet finance forums. I've learned a TON from these people over the last 8-9 years. The people there really understand this stuff. These are the sorts of people that work together and systematically test the credit scoring systems to determine precisely how they work, what level of impact various actions have on your scores, how long those effects last, etc. They've figured out how to game the system, applying for 20 credit cards in one day so that you can gain hundreds of thousands of dollars in credit at one time, without lenders denying you for having to many new cards. These are the people that figured out you can "bump" your credit report...sign up for a credit monitoring service, and then pull your credit report one or more times each day, in order to overflow the statically sized "inquiry" queue, knocking out the "hard pulls" (which are when you apply for new credit...the ones that actually affect your credit score) and replacing them with "soft pulls" (inquiries that don't affect your credit score, which includes things like using a credit monitoring service).
I'm waiting to see a solution you propose. By what method should a bank decide you are not only capable, but willing in the past, present, and future to make repayments on debt?
I didn't think much of credit scores when I grew up. I have assets, lots of them. My cheaparse car, cash. My phone, prepayed. My credit card, is linked to a debit account. I have shares and investments. I even had about $80k cash. If I liquidated everything I probably had a net worth around $300k
That didn't come into it though when I asked the bank for a $350k loan. A search showed no credit history. No way of knowing if I am a good little angle and pay my bills on time. How would they know? I have no bills. All they saw was a man with money, who needed more money, and who may or may not pay them back. And if he decided not to pay them back there'd be an arduous process to get through to get the money back.
Now you don't need massive amounts of debt to get a good credit history. Something as simple as a mobile phone on a plan rather than pre-paid system is provides you with credit history. Get a credit card, but don't use it, many banks will give them to you for free anyway. What this shows it that you never missed a credit card repayment. There's all sorts of things you can do to give you a good credit history short of spending $30k of the banks money on a car you don't need.
The idea that everybody has to have insurance sounds like a good idea because this can help to settle disagreements right?
In practice itÂs a corrupt tax.
If you want to bypass all this and have the minimum requirements to self insure (ItÂs about 100,000 in the UK) you can bypass this BS.
A blog I run for the wealth
Even the most severe depression can lift briefly. They MIGHT have caught a cheat OR they might have taken a severely depressed person's one and only moment of happiness in years and turned it into just one more tragedy.
Somehow, I doubt they really cared which it was as long as they got away with it.
As a society we have never been able to really tell the good guys from the bad guys even under intense scrutiny. The credit industry would be reckless if they took these types of associations into account in relation to loans and interest rates. It is not a "freedom of association issue" as that clause is aimed at government and not at non-governmental situations. People and I suppose companies as well are free not to associate with individuals based upon their personal associations. Somehow society needs to look at frightening facts. We now know that many innocent men have gone to prison and surely to death row for rape. The chances are that we would find many more innocents across the entire legal spectrum who have been wrongly convicted and punished. If we were getting false convictions for rape just imagine how many people who were convicted of armed robbery must exist. After all, armed robbers usually have a mask, watch cap, dark glasses or numerous other foils designed to stop a positive ID from being made. The terror of a gun and the speed at which armed robberies take place probably makes an ID of a crook really shaky at best. Anyone who thinks that they know bad guys when they see them would have a really hard time explaining Spiro Agnew or Richard Nixon or the overwhelming devotion to a young Adolph Hitler during his rise to power.
Leaving aside that I have doubts that looking at someone's facebook page will tell you very much about their credit worthiness. I think banks and other companies wishing to give you loans/finance should be able to use any information they can obtain to look at whether you are a good credit risk. If your myspace page can in a documented proven way tell them whether or not you are a good loan risk then they should be able to use it, I'm halfway tempted to say that they should be required to use it. Remember this whole financial crisis we seem to be having because the banks lent a load of money to people who couldn't pay it back? Is it really a good idea not to use any possible method to try and pick out people who wont repay their loans?
Funny, I'm already surviving for more than 30 years with the idea of saving money before you spend it. The only reason I use a credit card is because sometimes it's impossible to pay something another way.
You seem to have misunderstood me.
After paying rent payments for 360 months, I'll have more money than I would have paid towards the principle in my home. Therefore, after 360 months, I'll own a larger chunk of cash than I would have had equity in my home.
This means that after that 30 years, I could buy a house cash, and have a bunch of money in the bank, instead of having a house and being broke.
It's been a long time.
Depending on the land taxes, it doesn't take much.
The city I'm in has ridiculously high land taxes, equal to 300 dollars a month. a fixed rate 30 year mortgage for $200,000 at 4% will cost about 400 dollars a month in interest, all totaled.
So we're talking $700/month already. My rent is 900/month,so all it takes is 200/month or 2400/year of house maintenance to completely wipe out any savings in equity. The house I'm in already needs major work that would cost much more than that if it were my problem. You're probably going to want to insure that investment too, further cutting into your principle.
It's been a long time.