Aramis Night said:
Verlander said:
Aramis Night said:
Gilhelmi said:
Aramis Night said:
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I'm not in debt to anyone for anything(something credit agencies seem to despise. Whenever they run a background check on my credit it comes out with a bad credit score because its blank). I live within my means and have been given no handouts, or benefits of any kind.
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I am bugging my congressmen and representatives, to pass legislation to automatically give good credit points to people every year they do not have debt. Trying to get others to join me.
I am thinking about getting more involved in politics just to bug people to fix problems like this. It is good too see other fiscal conservatives out there (Note: I said FISCAL, just nipping the dozen people hating on me for saying the "C" word)
I would love it if my lack of debt would reflect well on my credit score. But i don't think that passing laws is the answer. It just shows that credit scores are less of an indication of risk and more an indication of potential profit for lending agencies. If you do not have debt and are driven to stay debt free, than any lenders you deal with don't stand to make much money on interest dealing with you and have no incentive to do so.
One solution i would like to see is credit scores being information beyond the reach of any businesses that are not lenders and only with your permission to obtain a loan or credit. Living within your means could in some fields actually cost you promotions because some employers do credit checks.
Oh and don't worry. I'm not offended by the notion of being related to fiscal conservatism. My positions are varied, but i'll admit that fiscal conservatives have a lot of good points. I'll take that as a compliment
The "bad credit rating" is more to do with the fact you can't consistently prove that you can pay back within your means, rather than profit making. Some people who massively borrow can have a great credit rating, as can people who borrow very little - the rating isn't dependent on size of debt, or potential profit, but the risk of you taking out a first time loan and never being able to pay it back because you're not used to it (or you already have allocated your monthly renumeration, like salary).
A really simple way to boost your credit rating would be to get a minimal charge credit card and spend maybe £10 or so a month on it, paying the debt off immediately so it doesn't accrue any interest. As credit rating systems are mostly automated, this will begin to eventually give you a great rating as a reliable lender. It's easier said than done though, and don't use the credit card for anything more than this - those things are also the easiest way to get a bad credit rating through abuse of the card. It's far too tempting when you are stuck for money or in an awkward situation to use them beyond what you can safely pay back
You're actually making my point. People who can't live within their means constantly have to borrow money or live on credit. The fact that people who massively borrow can have great credit scores illustrates just how profit based the credit score system is. If they were actually good at allocating their funds properly, they would not need to borrow money. You can slip further and further into debt and your level of inability to live within your means and to pay back your debts will be masked by being offered increased credit limits or transferring debt to different lenders/cards without ever actually having to pay off the balance of previous debts.
The fact that your solution is simply another method of manipulating the system shows just how broken the credit rating system is. Aside from obtaining a credit score, what possible reason can one have to keep a debt balance of $10 when they don't need to be in debt? As it is, the credit rating system lumps together the most financially responsible with those who are the least financially responsible.
For myself, being without debt is a matter of honour. I know its a concept unfamiliar to most. Carrying debt should not be normal, as it is for most people now. Holding onto debt is irresponsible.
I wasn't exactly disputing your point, just making a friendly contribution
The fact remains though that borrowing should never be about being able to support yourself, and is unsustainable if you try. That's why the credit ratings system exists. If you have a large amount borrowed, it doesn't mean that you are surviving on that, it means you are using a financial system to support your activities, possibly even in a way that benefits you.
Here's a brief, casual friendly explanation (I hope). I work for a UK based international firm - to give you a scale, despite being UK based, we are one of the top 5 largest privately owned businesses in the US. Our net revenue at the end of the 2012 fiscal year was over $30Bn. We are big. We borrow insane quantities of money each month. Why? To pay wages. Every member of our firm is paid out of a credit agreement by a financial services company, because the payment is reliable and on time (whereas clients paying our bills may not be). The speed in which our bills are paid reduces the interest we pay, and we factor in this provision when creating our bills, but the important thing is that we pay our staff efficiently, we comply with local laws, we pay our taxes and so on. We are not in any danger of being bankrupt anytime soon (even though we pay $millions per month interest from overdue patyments from our clients). We have a very good credit rating. We would not be able to comply with renumeration laws, or similar without this service, and it is almost certain that every major company or firm does exactly the same thing.
It works on an individual level too - that's what consolidating a loan is, or consolidating bills, and many people choose to pay for bills from a credit account that they monitor and pay off with their own renumeration, especially if they are paid out of the normal "month end" system that utilities companies tend to accept as standard. As for that, who pays for utilities before you pay your bills? Well, they take a loan, and pay off their loan with your bill. The problem with all of this is that some people want money up front (such as suppliers), and some can only ask for payment once a product has been delivered (utilities, services, even things like computer games and movies). To bridge that gap, credit exists.
My recommendation of "£10 a month" won't give you an excellent rating, but it gives these guys an idea of your responsibility, and will get you off that dreaded 0 mark. You obviously don't have to take it, but you would have to live in the middle of nowhere nowadays while earning a great deal in order to buy a house or car without credit being involved. That's a problem sure enough, but it's definitely not one that fiscal conservatism/capitalism would ever solve. Personally, I don't have a massive problem with it, the system works when people are responsible.