| Readers react: Credit reporting system stinks!
| | By Bankrate.com |
| Your credit rating can make you
or break you and chances are you either love the way the system works or you hate
it.
We asked readers to share their
experiences and views on the existing credit system. Here
are excerpts from the responses we received on the "hate it" side:
I have had a perfect credit report
with a lot of activity from years of school loans, car loans, house
loans and credit cards. One day I checked my credit report and a
late payment showed up from my mortgage company. It came from my
home equity loan which had been refinanced. During the refinance
there was a 25-cent interest charge left from the previous loan
to the next. I had called in to the mortgage company at the time
my statement came in and asked if I could wait a month to pay this
since things were changing and it would cost more in postage to
pay it. I remember having a bit of trouble with this person (bad
day at the office I guess) and it was reported as a 30-day late
payment. I called again ... they said they would clear it up for
me.
When I checked into getting a loan
for a new car I was told one late payment on my credit report bumped
the loan up by 0.5 percent. I was shocked that a 25-cent unpaid
bill could change a loan by hundreds of dollars. Lesson learned,
even a small nick on your credit report by the smallest of things
can add up to large amounts of money over time. -- K.H
....................
As a homeowner, educator and counselor
I had one client whose credit score dropped despite the fact that
there was not one letter changed in the entire report, including
inquiries (this from a preclosing update report which should definitely
not drop a score like this). Confidence in credit scores? Why should
we have any confidence when no one will release the exact calculations
involved? How can we know they really are legitimate? It's just
another good idea gone bad and can't be trusted until FICO fesses
up. -- P.H.
.................... I
wonder about how you attribute fault when it comes to bad credit. Is it really
my fault I got $8,000 worth of debt from a wife that ran off with a friend after
I was severely injured and permanently disabled in a car wreck while stopped at
red light? A drunk didn't stop at all -- not exactly my fault. Before the injury
I owned a business and earned $250,000. I was pretty careful about debt -- though
my ex ran up the $8,000 in the two months before she left. One can ruin one's
credit rating through disability, illness, divorce or business failure. That's
after years of careful planning and sound financial practices and savings. I just
happened to encounter all of them at the same time.
Sure I would have been better off
working for a corporation and not starting my own business and creating
lots of jobs. But I had heard something about the American Dream
and went for it. Oh yeah, I did have disability insurance. And they
had some kind of loophole that I was too tired, depressed and broke
to fight about. They never paid a dime -- and it was a perfectly
reputable company. Now I have a lousy credit rating because I totally
refuse to use credit at all. Can't win, can I? -- J.R.
| 
