[Roccland]

Just curious...

I think they are and will be obsolete in the years ahead.

[ColossalContrarian]

Credit will be associated with everything we need and do in the US. Low FICO means you don't pay your bills.

If you don't pay your bills you should be forced to work off your debt. I see a future with indebted people being treated far differently than those with a savings and good credit score.

[Alanintx]

As we enter this deep and long lasting deflationary period, your FICO score will not matter one bit. There will be no credit available, period.

It will not matter if you have a stellar credit score, and no current debt as there will be no credit available. It is going to take the banks a long time to reinflate, and even longer for consumers who survive the coming deflationary period to become willing again to assume even modest amounts of debt.

The old joke is going to become the truth; in God we trust, all others pay cash.

[Roccland]

$this->bbcode_second_pass_quote('ColossalContrarian', 'C')redit will be associated with everything we need and do in the US. Low FICO means you don't pay your bills.
If you don't pay your bills you should be forced to work off your debt. I see a future with indebted people being treated far differently than those with a savings and good credit score.

[nobodypanic]

$this->bbcode_second_pass_quote('ColossalContrarian', ' ')Credit will be associated with everything we need and do in the US. Low FICO means you don't pay your bills.

[SchroedingersCat]

I disagree. FICO scores and credit records are being used for more than just loans. Interest rates on your credit cards can fluctuate based on your credit scores. Many employers now check credit reports before hiring. Renting an apartment, applying for insurance, some government permits or licenses, getting phone or utility services, etc.

We are consumers now, not citizens.

[kpeavey]

I have a low credit score. It is not because I don't pay my debts, it is because I have no debts. When I bought my truck, I had NO credit score as I had no debt. It was a miracle I was able to get a loan. 1.5 years into it, 1.5 years left, will be paid off in about 10 months. The only other loan I have is a house-seller financed, not reported to a credit bureau. Since I do not use credit, I am punished with a low score. The payments are made ahead of time and in larger amounts than the minimum due. Total remaining balance of these loans=$25k.

A credit score can also be seen as a measure of how much money the banks can make off you. They don't make much off me, hence the low score.

[Tyler_JC]

Try getting a mortgage in today's environment with a lousy credit score.

As credit availability dries up, only the most qualified buyers will have access to it.

It's nice to be able to sit on your high horse and talk about how you don't need access to credit but for most people the ability to get a mortgage, a student loan, a credit card or a home equity line of credit is very important.

[ColossalContrarian]

$this->bbcode_second_pass_quote('nobodypanic', '')$this->bbcode_second_pass_quote('ColossalContrarian', ' ')Credit will be associated with everything we need and do in the US. Low FICO means you don't pay your bills.

[ColossalContrarian]

It would be nice is to hear from someone who has poor credit and how their daily life is.

What do they need to do differently because their FICO score gets in the way in various parts of life?

Maybe it doesn’t make a difference because they pay cash all the time. I’m just curious to know if having poor credit effects people’s daily life.

[gollum]

I'll bite on that, last time I ran the scoreI was in the 50 percentile (I done remember the exact score). Just applied for credit for an atv. I was approved at 12.99% for 60 monthes. (I decided to go used). I was surprised that in this atmosphere I was given credit for what amounts to a toy that easily. I still get probably 3-5 credit card offers in the mail a week. I own my house and have good relations with the credit union so the score is not that important to me. My credit card rates are between 12-15% I dont know if this is good or not.

[kpeavey]

$this->bbcode_second_pass_quote('Tyler_JC', 'I')t's nice to be able to sit on your high horse and talk

[Tyler_JC]

12.99% for an ATV loan? Ouch.

(Using bankrate.com's data)

For comparison's sake, a Wyoming resident with a FICO in the excellent range could get a $5,000 home equity loan for as little as 7.5%.

Someone with a FICO only in the fair range would not qualify for this or any other type of home equity loan.

I think they let you take out a home equity loan if you have equity regardless of what you plan on doing with the money.

Rather than pay usurious interest rates for an ATV, it might make sense for the excellent FICO borrower to use his home equity as collateral.



Then again...maybe not.

[JJ]

$this->bbcode_second_pass_quote('ColossalContrarian', 'I')t would be nice is to hear from someone who has poor credit and how their daily life is.

What do they need to do differently because their FICO score gets in the way in various parts of life?

Maybe it doesn’t make a difference because they pay cash all the time. I’m just curious to know if having poor credit effects people’s daily life.

[TWilliam]

$this->bbcode_second_pass_quote('ColossalContrarian', 't')he nice thing about credit scores is that you can see who is reliable and who isn't

[alpha480v]

Screw the fico score. I pay cash for what I need, and if I can't afford it, we buy used or we go without. If I pay for something in full then I don't owe anyone anything. My credit score is shit and I could care less.

[nobodypanic]

$this->bbcode_second_pass_quote('alpha480v', 'S')crew the fico score. I pay cash for what I need, and if I can't afford it, we buy used or we go without. If I pay for something in full then I don't owe anyone anything. My credit score is crap and I could care less.

[Roccland]

$this->bbcode_second_pass_quote('nobodypanic', '')$this->bbcode_second_pass_quote('alpha480v', 'S')crew the fico score. I pay cash for what I need, and if I can't afford it, we buy used or we go without. If I pay for something in full then I don't owe anyone anything. My credit score is crap and I could care less.

[vision-master]

The neighbor works with car buyers that have poor credit. He say's ppl now pay 23% interest, if they even get a loan. I'll keep with a nice high FICO score, thank you.

I used a line of credit, that's now at 5.75%. I could pay cash, but why, when I pay $60 Month auto payment?

[Roccland]

A recent post from TAE...

$this->bbcode_second_pass_quote('', 'I')largi: It’s not really that hard: in the last few decades, credit has been seen, treated and used as money, as always during economic expansions. In fact, lately an insane amount of it has been used as such.

Now that is over, and the only way to purchase anything will soon be with money, which means cash, gold or silver, because credit will disappear. This will shake our societies to the core, like a quake measuring 9 on the Richter scale.

Wherever you look in our neck of the world, credit finances everything. Without an open credit line, 99% of businesses and governments simply cannot function. WIthout credit, home sales will become extinct, as will new car sales.

But during the sharpest contraction in US money supply in history, the president of the Federal Reserve, the secretary of the Treasury, and all the media are still incessantly talking about inflation -and stagflation- as the biggest problems in the economy.

However, looking at the numbers of the crunching credit and money supply, one thing is obvious: no matter how one defines inflation, the sharpest contraction in history cannot possibly exist alongside inflation. It is impossible.

It's so ridiculous, it is utter nonsense to even suggest it. In any and all serious economic models and schools, it’s 100% evident that this sort of contraction shouts DE-flation. And they know it.

So why do the very people like Bernanke and Paulson, who have access to better data and counsel than anyone else, continue bleating out about what they know to be a lie?

For one thing, because it allows them to make people accept increasing government expenditures, while at the same time depressing wages.

After all, higher wages would lead to inflation, or so is the argument that nobody dares question. And the government needs hundreds of billion extra, if only to fight inflation. And save the bankers without whom society would presumably collapse.

Second, it diverts people's attention away from where they are really losing money. Let them focus on $4 gas, and forget the 30% loss -with more to come- in home values, and the $1.5 trillion doled out, in their names and on their tab, to the financial industry. Just repeat the inflation mantra every day, and they'll forget about what's far more hurtful. Till it's too late.

Inflation is not a few temporary price rises. It’s a money and credit supply that expands relative to what can be purchased with it.

With individuals losing $20-30.000 per year on the value of their homes, banks too broke to write loans, companies losing trillions of dollars in writedowns and falling share prices, and various levels of governments losing money from tax revenues, investments and bonds sales, there is no expansion. Quite the opposite.

What makes the lie so easy is that people have been brought up with the concept of inflation, and what it may lead to. Nobody today has any idea what deflation will mean. Well, that is about to change.