Pookie
Hi, all
I finally had to weigh in with my two cent’s worth on credit scoring. I recently obtained a mortgage at 7.9 percent. Why such a “high” rate in this era of supposed bargain mortgage rates? Simple—my credit scores were too low—between 620 and 650 for the three scores my lender used. I guess I was lucky to get a mortgage at all. What really annoys me is that I don’t think my risk justifies those scores; I had two auto loans over the past 10 years, both of which were never late and were paid off early, a previous mortgage on a condo that was NEVER LATE in the nine years I owned it. I also have one credit card, but I never use it—it is for emergencies only. So, I guess I am punished because I don’t service a lot of debt and therefore have more liquid cash. From what I have been able to understand, had I been more in debt, my scores would have been higher and I might have gotten my mortgage for as much as one percent less (??).YEEESHH!!
Credit scoring is phrenology for the 21st century. It is a reductionist concept that tries to make a three-digit number the ultimate measure of the person for loans, insurance, employment and, I imagine a distinct possibility, character as well—the part is greater than the whole, so to speak. I can almost imagine what goes through the minds of these people: “Here comes a new customer/ potential employee etc.; let’s pull their score to see what type of person they are.” It’s racial profiling without race. Credit scoring’s supporters cite “statistics” that they claim makes scoring the Holy Grail of lending, but so what? People also have also cited “statistics” as justification for oppressing racial and ethnic minorities in the past, too. In the late 19th century, there was a even school of thought in this country that claimed an individual’s physical characteristics could reveal their propensity for criminal behavior. Such models are now laughable as they fell in the wake of critical analysis and enlightenment; credit scoring is no different, it is just another in a long and ignoble line of “one-size-fits-all” attempts to reduce complex human behavior and all its variables into an easy-to-read, bite-size package.
I have also read your postings on insurance scores that are based on an individual’s credit--the better their credit, the less their risk, according to the insurance companies. Where I live, people who run red lights at intersections account for a large number of accidents. I guess if I improve my credit I’ll have less chance of getting hit by someone running a red light? P.T. Barnum was right.
Sorry for the long rant-n-rave, but I am really mad.
I finally had to weigh in with my two cent’s worth on credit scoring. I recently obtained a mortgage at 7.9 percent. Why such a “high” rate in this era of supposed bargain mortgage rates? Simple—my credit scores were too low—between 620 and 650 for the three scores my lender used. I guess I was lucky to get a mortgage at all. What really annoys me is that I don’t think my risk justifies those scores; I had two auto loans over the past 10 years, both of which were never late and were paid off early, a previous mortgage on a condo that was NEVER LATE in the nine years I owned it. I also have one credit card, but I never use it—it is for emergencies only. So, I guess I am punished because I don’t service a lot of debt and therefore have more liquid cash. From what I have been able to understand, had I been more in debt, my scores would have been higher and I might have gotten my mortgage for as much as one percent less (??).YEEESHH!!
Credit scoring is phrenology for the 21st century. It is a reductionist concept that tries to make a three-digit number the ultimate measure of the person for loans, insurance, employment and, I imagine a distinct possibility, character as well—the part is greater than the whole, so to speak. I can almost imagine what goes through the minds of these people: “Here comes a new customer/ potential employee etc.; let’s pull their score to see what type of person they are.” It’s racial profiling without race. Credit scoring’s supporters cite “statistics” that they claim makes scoring the Holy Grail of lending, but so what? People also have also cited “statistics” as justification for oppressing racial and ethnic minorities in the past, too. In the late 19th century, there was a even school of thought in this country that claimed an individual’s physical characteristics could reveal their propensity for criminal behavior. Such models are now laughable as they fell in the wake of critical analysis and enlightenment; credit scoring is no different, it is just another in a long and ignoble line of “one-size-fits-all” attempts to reduce complex human behavior and all its variables into an easy-to-read, bite-size package.
I have also read your postings on insurance scores that are based on an individual’s credit--the better their credit, the less their risk, according to the insurance companies. Where I live, people who run red lights at intersections account for a large number of accidents. I guess if I improve my credit I’ll have less chance of getting hit by someone running a red light? P.T. Barnum was right.
Sorry for the long rant-n-rave, but I am really mad.