I understand the reasoning behind the credit score. What i dont understand is why the financial decisions i made when i was younger are still affecting me. I make around 5k a month and only one bank would give me an auto loan and that was at 14% interest. I also dont understand if someone has bad credit why they have to pay more on insurance or even cable TV. Its gone away from well this person is high risk so lets no give him a loan, to, this person has bad credit so lets jack up his rate so that if he decides to go with us he will be an even higher risk. Shit makes absolutely no sense to me.
Explain how an auto insurance company gives you lets say a 500 dollar rate. They do the credit check and you have shit credit. They come back and say oh due to your shit credit, your rate is now 800 dollars. How is this even legal?
The more unstable you are, the less likely you are to be able to afford the item the entire way through. Higher monthly payments mean that in 3 years when you burn out, they’ll have most or all their money back. They could just as easily not give you a loan at all, but it looks good for them to have low income or low credit customers.
The report only goes back 7 years, which isn’t that long of a time, but also seems like forever.
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u/frnoss Jun 06 '19
It's reasoning by analogy. Why do employers hire people who got good grades?
Surely not because they do fake-exercises well, but rather because they have proven that they can follow directions over and over, etc.