American working class, Consumers, Credit score, financial institutions, Inequality, Payment & credit history
Components of Our FICO Credit Score
Numbers are an integral part of our lives. From an early age, they define who we are as individuals: age, height, and weight. We occupy space and status in the world, evident by our residential street number and zip code.
The older we get the more numbers we accumulate: social security, bank accounts, credit cards, driver’s license, and passport. These numbers define our personhood and achievements.
Then there is our credit score.
Based mainly on our payment and credit use history – see above chart – the credit score indicates our risk as borrowers. On a scale of 300 to 850, the higher our score, preferably in the 700s, the more attractive we become to money lenders. There’s no hassle to get a loan to buy our dream car, that house in the suburbs perfect for our kids, or enroll for a Masters in Business Administration.
The advantages don’t end there. We’re rewarded with lower interest rates on our auto and student loans and mortgage. In other words, the higher our credit score, the less we pay over our lifetime for goods and services.
My sons and I first learned about the credit score on our first bank visit to open a checking account and apply for an American credit card. At that time, I had an international credit card account issued and payable in Brazil. My excellent payment and credit history had no value in the United States.
My credit score was zero.
Five years later, I began receiving credit card offers in the mail. I accepted an offer from Capital One with a $250.00 credit limit. Two years later, when my credit score hit the 600s, pre-screened credit card offers from major American banks flooded my mailbox.
I have observed that increased debt raised our credit scores. Additional credit cards with higher credit limits also upped our scores. The more we spend and borrow, the greater our value as individuals.
The American credit score system perpetuates inequality.
Low-income, hardworking, honest people with limited access to credit are defined by low credit scores. The owners of Walmart have amassed a fortune providing them with low-cost goods produced by low-income workers across the globe.
High-income middle class workers, who pay their debts, are defined by their top value credit scores. Our financial institutions have become power brokers providing them with credit and other financial products.
The propagators of the credit score system are not defined by credit scores. Their wealth allows them to pay cash for high value goods and services. Immune to the control and demands of the consumer numbers system, they created massive, criminal debt, bringing down the world economy in 2008. Their impunity allowed them to pass on their debt to you and me.
I am a mere consumer number. Do you know your number?
Reblogged this on Guyanese Online.
Rosaliene Bacchus said:
Cyril, thanks for reblogging my post on the Guyanese Online blog.
As always, much appreciated.
de castro said:
My credit score is also zero as I am now over 65.
My son a financial consultant advised me…..DAD borrow as much
as possible before you reach 65…..I defaulted on 4 Banks who were
willing to lend with no collateral as security….
Years later I still receive letters from third parties who
will reintroduce my credit rating if I agree to pay only 10%
of the debt….my guess is my debt has been written off by so many banks
against tax that it seems ridiculous to try and recover it now.
However this was long before the “melt down” in 2008.
NOT GUILTY….it was only a few thousands.
Hey BRAZIL defaulted twice on WB loans in as many decades
…today BRAZIL is a lender not borrower….I will lend you as much
as you wish but the question is at what RATE OF INTEREST.
The higher the risk the higher the rate…..that why third world countries
were “Povertised”….33% plus loans….
But as am forever the optimist the situation is being reversed.
Also may add ….individual debt is on the up….in underdeveloped
Its a catch 22 situ…
Rosaliene Bacchus said:
The banking credit system feeds on our indebtedness. They want us to borrow more so that they can earn more with interest fees. When we assume more debt than we can repay, we suffer the consequences.
Individual debt goes up when people lose their jobs. The world financial crisis ruined our lives. The perpetrators continue to fill their coffers while we pay the price for their crimes.
de castro said:
I do not despair but try to be positive / realistic.
Banks and banking institutions are “money merchants” in it for
profit/gain…sad fact. How politicians address this issue will
have dire consequences unless they get it right.
Their jobs are on the line next time round in the voting results.
People are much more informed today and act accordingly
in their decisions voting the idiots out and hopefully replacing them
with “lesser” idiots.
Banking laws nationally and internationally is the issue and how to
TAX them fairly/honestly.
Internally (nationally) the process is quick and easy to implement/enforce.
Externally (internationally) the process is slow and difficult …even in
many cases impossible to implement/enforce.
Banks are mobile and have the technology to move ,”fast”…
G8 will hopefully help to resolve this issue…..but to reach international
agreement it would take more than a UN …224 countries agreement.
As it must be unanimously acceptable.
DAVID CAMERONS dilemma.!!
Will comment further after G8 decisions are published/made public.