Loose Cannon Style

It looks like due to the credit card debacle, FICO scores have been steadily increasing for consumers nationwide. I am basing this hypothesis on a 3 month 30 point increase in my own credit score.

How is it possible that in 3 months my fico score increased significantly?

It’s possible if you consider that the same credit card companies that just a year or two ago were overflowed with borrowers and thus seeking to turn away those with low credit scores are now drowning in debt and seeking new cash flows agressively.  In essence: New borrowers with new debt that can afford to make new payments creating the cash flows that these companies desperately seek to be able to continue day to day operations.  The difference is that this time only small amounts of credit would have been extended to them, as credit card companies are slashing the credit limit’s of even their best consumers.

That just goes to show you that credit scoring can be changed on a whim by FICO to accomodate these credit card companies which are actually the ones that use credit scores to rate consumers.

My credit scores have been steadily increasing, sure, this could also be due to the fact that im doing well as well as the fact that I’m rapidly paying down my one credit card balance.  But come on?

My middle score is now 646
my scores are TU - 656 , Equifax (the hardest of them all) 646 , and Experian 630.

I do not doubt that soon (in another quarter or so) my credit score will exceed 680.  It is ironic because now that I think about it, why have I been trying to increase and fix my credit this entire time?  So I could run out and charge up a bunch of new debt?  Folks, that was yesteryears mentality.  The Debt Party is finally over and the fireworks were spectacular, but please, don’t kick a dead horse.  Let it die gracefully.

I now realize that the two biggest factors responsible for it (my credit score) getting as bad as it did are simple :  irresponsible and de-regulated lending along side my own lack of personal responsibility.

It is also de-facto knowledge that credit card companies often extend huge lines of credit to the weakest borrowers, because they are the ones who are most certainly likely to get into trouble, allowing credit card companies to charge what is really the basis of their huge profits: Fee’s.  Fee’s are the most profitable part of a credit card companys’ operations because they represent 100% profit.

The End result is that the financial system has lost my faith completely.  And ultimately, it is not my loss, it is essentially their loss.

Because I don’t need them.

I can choose not to buy all the crap that I bought before this time around again ( I know, dangerous thinking), and by changing my budget and saving instead of spending, I can live a real life, debt free.
I am fortunate, I suppose there are others whose income does not permit them to make ends meet, but I do not think that represents the majority of people in the US.

The de-regulation of financial markets and companies has left egg on the face of not only the companies who caused it (the debacle) by over extending credit, but also on consumers who were bamboozled into cheap credit even to their own detriment.  In my honest opinion, credit should be extended to an individual based on his or her ability to repay, you know, the way it has always been before this whole fiasco.

I do not doubt that the majority of the US population has gotten way in over their heads due to credit companies extending way more credit to consumers than they could possibly ever afford.  You could argue that it is not the governments job to tell us how much credit we can afford, sure this is true.  We couldn’t possibly put all the blame on the government, after all, Caveat Emptor.  Consider though that no type of education is provided in schools period related to anything even remotely related to finances or credit cards.  We strictly regulate driver licenses because we want to make sure that people getting behind the wheel of an automobile have at least passed a minimal standard for competency, but we put our kids into the drivers seat in what is the vehicle of their own financial future without so much as even a warning.

Lesson Learned.

The sad fact is that what we choose to do with our discretionary income has a huge impact on our own future, and irresponsible lending provides a dangerous outlet that quickly fleeces consumers out of this income.

The Point, my credit score may be extremely high, but I already cut up all my credit cards.

The Definition of insanity is to do the same thing over and over again and each time expect different results.

I do not see any of these credit card companies winning me over ever again in the future causing me to open up a new line of credit with my new hard fought credit score.  In fact, the frustrations of dealing with the credit reporting agencies in my futile attempts to remove what little negative trade lines on my credit report remain are indeed still fresh in my mind.

“Screw me once, shame on you.
Screw me twice, shame on me.”

They have lost my faith completely, and I doubt I will ever return to owning a credit card.

Many people also feel the same way I do, and thus the reason why consumer spending will stay down for a long time to come.

This entry was posted on Wednesday, November 5th, 2008 at 12:36 pm and is filed under Corporate Corruption.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.