Last winter, I was required to have my credit rating checked with regard to a job I was applying for. "Uh, Ms. Stillwater," said the human resources guy, "there's something wrong here. You have NO credit rating." That is a good thing, right? Apparently not.
Apparently it's better to have BAD credit than no credit at all. People with bad credit at least play the game. "Ms. Stillwater," said the HR guy, "you are not playing by the rules." He had never seen anything like this before. Ever. NO credit rating? At all? What's with that? Was I a Communist or, worse yet, an anachist? Maybe I was a terrorist? The HR guy decided there was something not-normal about me. "How can someone with NO CREDIT be trusted in such a high-security job?" The guy actually TOLD me this!
Apparently, in America a BAD credit rating is better than no rating at all. What kind of statement does that make about us?
These people are living life on the edge just as surely as those of us who get our wardrobes out of the free box.
I understand HOW the American middle class balances their budgets by paying off one credit card debt by borrowing off of another one and other such tricks. This I understand. I have friends who talk about this kind of stuff.
PS: Someone just e-mailed me that I was being too hard on people who use credit. "We all use credit because we have no choice," he said. "Credit is a tool. A very good tool if it is based on the proper assessment and employment security. Of course it can be abused. But people who have to live in the system are not to blame. We do our best." He pointed out that it's almost impossible to buy a home or send your kids through college without using credit.
Point well taken -- but.... I'm talking about people who go into eternal debt for frivolities. Like the Bush bureaucrats who sent America into hopeless debt -- that we will never be able to pay off -- in order to buy a frivolous "war".
Here's another good example of putting one's family in danger: People who purchase those new McMansions by using the new pay-on-the-interest-only "Option ARM" to finance them. NOBODY needs that many rooms in their house if it ends up putting your family out on the street!
In his article, "The Neutron Bomb in Housing," John Case wrote, "Just out of curiosity, you stop into one of the Mall real estate offices. ....The friendly agent takes one look at your preliminary application. Then, she notices exactly which half-million dollar home photo you had been staring at while waiting, and says 'So, when do you want to move in?'"
"You're hooked," Case continues. "You're in the dream house.... Then, 29 months later, the bill for not reading the fine print...comes due. The interest ADDED to you mortgage principle from paying the minimum is now $50,000. The lender has exercised their right to "reset" your loan. Your new payment is $4,100.00 per month." $4,100 a MONTH? Oops.