Credit Criticism Why Credit Checks Might Cause Financial Problems - PowerPoint PPT Presentation

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Credit Criticism Why Credit Checks Might Cause Financial Problems

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With credit a hot topic in today's society, social media is more than sceptical when it comes to the FICO credit score and what financial problems a bad credit score can potentially cause. – PowerPoint PPT presentation

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Title: Credit Criticism Why Credit Checks Might Cause Financial Problems


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Credit Criticism Why Credit Checks Might Cause
Financial Problems
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  • With credit a hot topic in today's society,
    social media is more than sceptical when it comes
    to the FICO credit score and what financial
    problems a bad credit score can potentially
    cause.
  •  
  • Although a person's credit score can provide a
    lot of insight into possible risk due to poor
    money management, debt load, or existing
    financial problems, it can also cause financial
    problems that didn't exist before hand due to
    poor risk management, employment decisions, or
    impacted living.

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Risk Management
  • Great credit scores don't mean great customers,
    and the when lazy lenders look at the number
    instead of the whole inquiry, they put their
    clients at risk. 
  • For example, an elderly woman with a credit score
    of 680 might qualify for a great rate, but she
    wants to borrow money to take care of funeral
    costs for her husband. She has a small pension,
    several credit cards and with her husbands
    passing, has lost a second income. 
  • Realistically, extending this woman more credit
    could actually put her at risk for future
    financial problems, primarily because a number
    can't assess her situation on a personal level.

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Employment Decisions
  • Top of his class, graduate with honours, four
    years of experience, and he aced the interview!
    The young man in question is a prime employment
    candidate - that is, until his boss runs an
    inquiry. 
  • Although Experian, Equifax, and TransUnion have
    stated on record that they do not provide
    employers with a score, they do provide them with
    a record that can reveal previous jobs, past
    addresses, aliases, and financial information
    such as recent inquiries, debts and legal
    actions.  
  • When an inquiry reveals an applicant has some
    serious financial problems, he or she may be
    denied a position based on information that is
    not representative of their workplace abilities.

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Quality of Life
  • Every citizen has a right to a safe place to
    sleep, and by law are required to carry insurance
    when driving. Using credit to determine if an
    individual qualifies for a roof over their head
    or denying them the ability to abide by the law
    due to financial problems isnt just immoral,
    its unlawful, and concerns over increased use of
    FICO scores to ostracize individuals with
    financial problems may soon force government
    bodies to step in and say enough is enough when
    it comes to inquiry. 
  • Until then, individuals can only try a clean
    record by making timely payments, avoiding
    collections, and removing unwanted inquiries with
    the help of Inquiry Busters to ensure they arent
    denied important opportunities.

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