Are credit scores unconstitutional? - Page 4

[chickabiddy]

You are being "forced" to use credit to obtain the mortgage you want through the lender you want. There's no force involved. You're free to freeze your credit cards and look elsewhere for a mortgage. Put 20% down instead of less than 10%, and they may not care. Agree to a higher interest rate and they may not care.

You may not like what you're being offered, and I wouldn't either, but it's not a violation of your constitutional rights in any way, shape, or form.

[kijip]

Originally Posted by chirp

if it's a myth then why are we being asked to have revolving credit?

obviously it's not a myth in this case.


i don't know why you're not taking my word on this?
maybe i could invite you to the next meeting we have with our mortgage guy?

I don't doubt that what you are saying is correct in your situation...but there are other mortgage lenders and banks and credit unions out there besides your mortgage guy and people, such as myself, have in fact obtained mortgages without using credit cards. What I said it that it is a myth that you can ONLY obtain a mortgage by the use of revolving credit, not that it is a myth that some, even most, mortgage companies and banks like to see use of revolving credit when making mortgage loans. Conservative lenders, such as my local thrift which only lends their money and holds the notes and services them themselves, are more likely to base a loan decision on income, down payment, lack of debt, payment history on other loans, including student loans.

You have a down payment that is less than 7% of the purchase price- not 10%, not 20%. PMI is a factor there. You are a riskier proposition to a lender than someone with 20% down. Several decades ago, few if ANY lenders would have given you a mortgage with 7% down. Was that unconstitutional?

[kijip]

And what of the rights, constitutional or otherwise, of lenders? They lend to make money, not as a public service.

I agree with those that say that NO constitutional issue has been raised here.

Re: right to privacy, at least WRT obtaining a loan or credit you have no obligation to apply for a loan and open up your record to scrutiny.

WRT insurance use of credit score, states need to make it illegal IMO. Some states prohibit the practice already.

[ChattyCat]

$10K on a $150K house is not a large down payment. It's less than 10%. If you had somewhere between $15K-$30K (10-20%), they probably wouldn't care about revolving credit.

About CC's, mine are not 0% interest, but you have a grace period of at least 25 days to pay before you acrue interest. So, by charging all household expenses monthly and paying it off monthly, you develop a revolving credit history without incurring any fees.

[TexasSuz]

No, but then again ours is in the 800s so I guess I am biased about that....

[D_McG]

Originally Posted by ChattyCat

About CC's, mine are not 0% interest, but you have a grace period of at least 25 days to pay before you acrue interest. So, by charging all household expenses monthly and paying it off monthly, you develop a revolving credit history without incurring any fees.

Exactly.

And I agree that putting down less than 10% on a house is going to put you at the mercy of lenders.

[acegmom]

A question...

Originally Posted by chirp

our credit card is NOT zero interest. we would have switched them to a zero interest card but that lowers your credit rating.

another bill we pay every month, and they charge us interest.

Maybe I missed the explanation, but if all you put on the credit card is gas and groceries, that you pay off every month, why are they charging you interest? It doesn't matter whether it is a "zero percent" card, if you never carry a balance beyond the grace period.

Jill H.

(lucky mom to Amelia 18, Camille 16, Evan 13, and Gracie 11)

[KLM99]

Originally Posted by JamesMama

I completely agree.

DH has t1 diabetes, we've been swamped with medical bill after medical bill and our credit is TRASHED it's like less than 0 (well not literally but pretty dang close)

From my limited knowledge or thought on this topic - the point of a credit score is for companies/banks/whatever who are going to lend you money to assess whether or not you are likely to pay them back and then, if they decide to lend you money, to decide at what rate will be satisfactory to cover their risk. While obviously no one is to blame for having medical bills and on a personal level I really really really feel for you and anyone who has bad credit through no fault of their own, that's not the company or bank's fault - they would want to know that a person hadn't paid bills and wouldn't be able to in the future so they won't lose their own money. Fair? Maybe not - but life isn't.