Credit Markets and Your Personal Credit
During the past few months millions of Americans have lost thousands of dollars in invested dollars with the slowing of the US economy. While I won’t go into all the driving factors I do want to note one problem that has yet to rise to the surface.
Being a financially sound citizen I have a 401k plan, an IRA, and both checking and savings accounts. I often keep track of my credit score which is in the the 700 range. I have a small amount of credit card debt that is totally manageable as well as a corporate credit card that is used for business expenses and travel.
A few weeks ago I considered purchasing a 2nd car and applied for a bank loan of which I was denied. Now earlier in the year I was already approved for this loan, but did not take advantage of it. At the time my credit score was lower – so what then has changed. The Credit Markets!
Not only have banks lost faith in the housing markets they have lost faith in consumers. They originally loaned gobs of money hand over fist to borrowers who could in no way afford the homes on the market – and in the end wound up foreclosing on a home and loan that should not have been bought in the 1st place. With the fall-out of this that banks have no way of identifying who is credit worthy and who is not. Your credit score is no longer any indication of your credit worthiness; it is bank independent – decisions being made by the same people who freely loaned money to unworthy borrowers.
I write this blog rant because the part that bothers me is this – my name and credit worthiness were in good enough shape for you to loan me money 9 months ago and the only thing that is changed in my backyard is that I’m now even more stable and worthy today and I’ve been declined. I’m certain that an inquiry will be entered onto my credit report for other lenders to reference when I apply again in the future. The bank’s declining my good name is their own fault – not mine. The consumer should not have the suffer because the the banking industries inability to properly manage and regulate it’s own inflated ego. In addition – credit inquiries during this slowed economy should be carefully noted and identified by Equifax, Transunion and Experian that the declining of credit on behalf of the bank was due to bank decision and not consumer credit worthiness.
The banking industry needs to be held under a microscope and held accountable for their poor decisions.
January 17th, 2010 at 12:07 am
Yup, you hit the nail right on its head and told it as it is. Keep up the great posts. BTW, getting into a large amount of debt is a nightmare and I learned it the hard way. I’ve since then almost paid up all of my debt though and wrote about it at http://HowToGetRidOfCreditCardDebt.org