02 Mar Credit Scores And FICO Need To Be Reformed Now.
I would like to know where I rank specifically with each credit reporting agency, and I would like to know what I can do today to improve my credit score. Is this too much to ask for? I would also like some guidelines, so that if I have a good credit score, the bank must charge interest of __%. I don’t like the game.
We are living in unprecedented times, there is no doubt about that, and the more things change the more they stay the same. Take credit scores for example. What do we really know about the scoring models used by Equifax, Experian and Trans Union?
We know that we are supposed to pay our bills on time. We know that if we don’t, our credit scores will get hammered. We know that the credit reporting agencies are in bed with the banks. The same banks that have received billions of taxpayer dollars in TARP funds. If you follow the money, this conclusion is very easy to reach. We also know that we really don’t know how our scores are calculated and what each of us can do now to increase the scores.
We also don’t know why we don’t have a uniform system to determine our credit worthiness. How come I get a different score from all three agencies?
I’m calling for reform of the current credit scoring models. The reason why is that I live in an area where foreclosures are going through the roof and people are losing their homes. We have vacant homes everywhere, and naturally, crime and vandalism are increasing daily.
People are going to need to re-establish their credit to purchase a home in the future. Right now, the number of people who are eligible to qualify for a loan is decreasing daily. Likewise, the number of banks willing to finance real estate is also decreasing daily. One of our local banks was recently taken over (Riverside).
Likewise, residents of Lee County, Florida are being told that they have to be 90 days late to qualify for a mortgage modification. Although that is a whole other story, this is severely crippling the consumer for the next couple of years in our current system of credit scoring.
Reform needs to be comprehensive and it needs to come swiftly. Otherwise, we are leaving the foxes in charge of the hen house.
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