Home Markets Personal Finance: Scoring Some Credit

Personal Finance: Scoring Some Credit


When it comes to scoring some credit, the world breaks down squarely into two camps. The first group has none at all and no credit history but harbors a desperate desire for access to credit so they can start collecting mass quantities of material goods and begin living the blissful life of their neighbors, the Tanenbaums.

In the other camp are the Tanenbaums that are in hock up to their asses with no clue how they got there in the first place and no idea whatsoever how to escape. The Tanenbaums just want to live a simple blissful life like their neighbors the Ratcliffs.

There are no other types of people. The perfectly content family with no debt and whose income is exactly to three times their cost of housing doesn’t exist. The last family to fit this description went out of existence in 1993 when the first 48” flat panel television was introduced at $5000.00 a pop. And, of course, every home needs more than one.

Even though both sets burned out long ago, the once perfectly content family is still paying the monthly minimum of $24.58.

American families owe over $11 trillion in credit card debt and that averages just about $105,000 per household. The average household income in America is only $53,046. Because America has more Tanenbaums then it has Ratcliffs it makes it much more difficult for President Trump to hit the 4% GDP growth he promised in his election campaign. But that’s another story for another day.

Being the American free enterprise system there is always somebody willing, for a price, to help the Ratcilffs and the Tanenbaums. Here are some free suggestions.

Say you are just out of school and no credit history. This familiar condition means you won’t be qualified for any credit card, bank loan or mortgage. Here is how you get started.

Go to the closest supermarket and purchase a prepaid Master or Visa card. There will be a small fee attached but that’s life. You load up the card in the same way you put money onto your debit card account. If you like, you can do it right at the supermarket or drug store. This sends a signal to the credit rating agencies that you are alive.

After a few months of loading and spending one of two things will happen. Some prepaid card issuers are beginning to extend limited credit to the regular prepaid customers. They have enticing names like “Credit Builder”. When this happens, you are on your way. Caution: the interest charged will jar your teeth so you must pay off your account immediately.

The other possibility is that companies like Capital One who specialize in people with low or limited credit history will send you a credit card offer in the mail. Again the rates are steep so always pay the balance as fast as possible. Before you know it you will be on your way to the lifestyle of the Tanenbaums!

Once you have reached the $104,761.91 US average in credit card debt, the next question, what do you have to show for your overwhelming burden? You can’t ask with the Tanenbaums, they had to sell their house and move to Mississippi.

Google has used their proprietary algorithms to figure access your financial straights and starts sending pop up ads for debt settlement companies, debt-counseling services and maybe even a meeting list for debtors anonymous.

The debt settlement companies will gladly take whatever cash you have left. A very professional sounding telephone sales people will promise to negotiate you debts down by 50% and schedule easy, affordable monthly payments that fit your budget.

Why are these guys worthless? When you take this route, all your credit card accounts get closed and that places a big hit on you credit score anyway. More importantly, you can accomplish the same 50% reduction by calling the credit card company and honestly explaining that you can’t afford to pay your account on time and make them an offer that works for you.

If your offer is declined, you have the option of letting the account go into collection. Agencies who specialize in collecting these debts have already discounted your obligation at least 50%. Yes, most of us were raised to be responsible citizens and to take our financial responsibilities seriously.

Here is something to keep in mind. If your credit card debt is anywhere near $100,000 and your income is only $53,000, chances are you credit score is probably already shot to begin with. Forget about having a healthy credit score that’s what enabled you to get into trouble in the first place.

Debt counseling companies are also standing by and for a fee will provide you with the following sound advise: stop spending money.

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