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re: Are Credit Scores Racist?
Posted on 8/24/17 at 2:12 pm to Brightside Bengal
Posted on 8/24/17 at 2:12 pm to Brightside Bengal
I worked at a finance co, mortgage broker, and bank. The main thing I take away is that it is a cultural thing. Money today is money spent. There is a skepticism or wariness of large financial institutions, so many deal mainly with fast easy credit sources. This is reflected in lower scores because of high-risk practices. This is across incomes.
Many had debt financed for someone else who had bad credit but didn't understand the consequences of that. Also, if it is a 3rd party payee and not the original creditor, they will ignore it. That is why mortgages that are sold become an issue for some people.
I believe there is a general misunderstanding of finance by a lot of people (of many races), but it is cultural how people handle it. Lending is actually a volume business, so some in that business will take advantage.
I also had many people who didn't understand student loan debt. They thought that if they didn't get a job, they didn't have to pay for the school. I believe a lot of this is to blame on the government and schools how they push this as well as the students themselves.
That being said, credit scores are a racket, but if a person has a low score, it is usually pretty accurate. Also, people think scares are solely based on history which is not the case. It is based on risk. I don't think the majority of people who comment on this in government or the media understand this.
Many had debt financed for someone else who had bad credit but didn't understand the consequences of that. Also, if it is a 3rd party payee and not the original creditor, they will ignore it. That is why mortgages that are sold become an issue for some people.
I believe there is a general misunderstanding of finance by a lot of people (of many races), but it is cultural how people handle it. Lending is actually a volume business, so some in that business will take advantage.
I also had many people who didn't understand student loan debt. They thought that if they didn't get a job, they didn't have to pay for the school. I believe a lot of this is to blame on the government and schools how they push this as well as the students themselves.
That being said, credit scores are a racket, but if a person has a low score, it is usually pretty accurate. Also, people think scares are solely based on history which is not the case. It is based on risk. I don't think the majority of people who comment on this in government or the media understand this.
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