Bad credit is among credit issuers? Credit grantors that might have an interest in consumer's with bad credit include: 1) CC companies with current customers that have low FIXED rates, particularly with very low FIXED BT rates that have large balances. A default reporting on any CRA will likely result in a significant rate Jack for that customer. 2) Those credit grantors that target consumers with bad credit. Often times, these grantors will Specifiy the parameters of the potential customer they are seeking within the databases of the CRA. Then begin marketing their products to these types of consumers. Names of well known companies that have built their business on those with sub-prime credit include: . Household Bank . Capital One . Providian . Ameriquest, American General Finance, and a . bunch MORE subprime lenders Certainly, credit grantors don't want deadbeats......you can charge them up the wazooo on interest rates and theoretically make tons of profit, but it won't matter, they will never pay. I don't think credit grantors want perfect credit either on all their clients. Perfect credit clients might be less risky, but because they are less risk, then they would demand the lowest available interest rates from the credit grantor. Cuts down on the credit grantors profits. But then there is the guy somewhere in the middle. He probably has some bad credit on his report, at least enough to justify a HIGHER interest rate to make for a more profitable customer. But whatever his derogatory item(s) is/are, still make him a "safe" borrower. If the demand for bad credit is higher than the demand for good credit, than **maybe** this might have something to do with why a CRA fights so hard to keep the negative information on our reports? The CRA with the most derogatory database is the one most likely to be accessed by credit grantors looking for some kind of bad credit against a consumer.
Try not to think of a high FICO as "good credit" - substitute "good credit customer". FICO, in my opinion - and I've seen it said before - is not just a measurement of risk, it's a measure of profitability. That measure combines minimizing risk and maximizing profits. If you are a careful consumer, never carrying balances and paying interest, you are not as profitable as someone who does carry a balance and pays it down. Anyway, if you see my thread on Cap1, I think they *count* on people screwing up and charging up the wazoo for it. You simply calculate your losses and build walls around them so your returns exceed losses. They will keep CLs low on an ongoing basis to keep their overall risk profile lower.
Thats true Dan regarding Cap. 1 The only problem is that once customers outgrow Cap. 1 then either 1 or 2 things happen: 1) Cancel Cap. 1 cards 2) Move all your Cap. 1 balances somewhere else Therefore, leaving Cap. 1 having to bottom feed to keep profits up or getting more customers from other prime competitors, but then, the profit margins are lower.
Seems right to me Dan. I was trying to figure out why a CRA or CRA's fight so hard to KEEP derogatory information on a consumer. In some situations it is so obvious a CRA should delete, but they staunchly refuse. Why would the CRA put up such a fight to keep derogatory information? Here is what I came up with: 1)Ensuring the integrity and quality of information provided to credit grantors------>If everyone were able to easily "clean up" their credit (remove accurate information), the information on consumers would be completely unreliable and unpredictable and the CRA's would be out of business. But what about inaccurate derogatory accounts that CRA's fight so hard to keep, that has zippo to do with the integrity and quality motto. Oh, and if the CRA is so concerned with "integrity", then why do they let a SINGLE creditor, such as a landlord, report a SINGLE derogatory account, but would prevent the SAME landlord from reporting a SINGLE positive account? I don't buy #1 is the only reason CRA's take such a staunch position. 2)Demand for consumers with bad credit----- I think the most profitable customer, as far as credit grantors go, falls somewhere in this category. I'm not talking about a dead-beat, but someone who has some kind of a ding in their report that they can JACK the rates up on or someone who is not going to get the "Prime" interest rate, yet still is not that risky. Ever notice posts where people complain that their last derog. was the hardest to get off their reports or is still sitting there?
1) CC companies with current customers that have low FIXED rates, particularly with very low FIXED BT rates that have large balances. *A default reporting on any CRA will likely result in a significant rate Jack for that customer. 2*I don't think credit grantors want perfect credit either on all their clients. Perfect credit clients might be less risky, but because they are less risk, then they would demand the lowest available interest rates from the credit grantor. Cuts down on the credit grantors profits. 3*But then there is the guy somewhere in the middle. He probably has some bad credit on his report, at least enough to justify a HIGHER interest rate to make for a more profitable customer. But whatever his derogatory item(s) is/are, still make him a "safe" borrower. 4)If the demand for bad credit is higher than the demand for good credit, than **maybe** this might have something to do with why a CRA fights so hard to keep the negative information on our reports? The CRA with the most derogatory database is the one most likely to be accessed by credit grantors looking for some kind of bad credit against a consumer. Cinderella ===================1 *It used to be illegal to do this . How did we loose this protection? 2*That's what fico does it lowers the mumber of these clients by artificially or falsely creating another more profitable category and automatically places them in it.3*Nothing justifiable about a higher rate on this. Fico is never a justifier only an invalid excuse.4)**No maybes about it.http://www.justsaywow.com/newfun4/mooyear.cfm ..
1*Why would the CRA put up such a fight to keep derogatory information? 2*Ensuring the integrity and quality of information provided to credit grantors------> 3*If everyone were able to easily "clean up" their credit (remove accurate information), the information on consumers would be completely unreliable and unpredictable Peta The Humane Society http://www.justsaywow.com/newfun4/mooyear.cfm ******************************* 1*Because Fico has fought so hard to screw you your reports and your credit. 2*With a 70% error rate there is no quality to protect and no integrity to assure. 3*the information on consumers is already completely unreliable and unpredictable. .. ..
