Sunday, February 2, 2014

Credit...



Who here remembers watching Fight Club.  The ultimate goal of the lead characters, to put everyone on a level playing field once again.  Yeah, its not really that feasible, I mean they have so many copies of things, that within a month or two everything would be humming along as it does now.

So, how many of you know you can pull a free credit check on yourself once a year, something that is advisable to do.  Just to see what is lurking out there on yourself.  With Identity Theft on the rise in the United States, and worldwide, the easy of getting information on someone else, it is a fairly easy thing to do to another person, and they won't even realize it has happened until you start getting harassing phone calls from some credit card company you don't use.

At this point, after everything is said and done, if someone stole my identity it wouldn't get them very far.  But that is not the point of this entry.  Today I am going to discuss credit.  You know, those plastic little cards, that allow you to buy things when you would be forced to do without.  That little thing that lets you buy a new car or home, when you cannot pay cash up front.  It influences so many things, it is not even funny.

Back in the day I was a cash and carry kind of guy.  If I wanted something I paid cash, I did not even think about credit, it seemed stupid to charge something to a card, and pay later, with interest.  So around 2007, the car I was driving started giving me problems, but in its defense it was a 1991.  I don't care how well you take care of a car, its going to start having issues after a certain age.  It was used up, and I needed something else to drive.  So off to the dealership I went, I really wanted to get a Chevy, Dodge, or Nissan.  Hey, I am a GM and Nissan man, they seemed to be the top quality of anything I had driven. 

Well, I also wanted to live within my means, which meant I had to watch how much my payments where.  So with an idea of how much I could afford per month, I went down to the dealerships, and started looking.  Issue, I had no credit history, so GM, Dodge, and Nissan came back with monthly payments around 1200 a month, well beyond my limit.  So my Dad called where he worked, got his purchasing agent to call the local Ford stealer-ship, and so I found a truck that would do the job, not a bare basic vehicle, not even middle of the road.  It was a tweener truck, had some nice features, but nothing fancy, no carpet, power nothing. 

The payment was at 700 a month, the absolute most I could pay.  Yeah, I could have gone used, but when you are a manager of a farm, dealing with business, you don't really need to be running around in a five year old truck or car.  Something that had been troublesome as I had always refused to get off that old car.  I loved that car. 

So, at some point, I realized that I really needed to build my credit, so I got one of those credit cards that charges you a monthly fee to have it.  I used it, paid it off, and this continued for many years.  Along the way, I acquired two more cards, picked up a second job, and used them as emergency use only.  If I needed to replace a tire for work, or needed gas on a pinch while waiting for a paycheck, credit card it was. 

Everything hummed along like that, me making the payments, and if I got over strung, would keep up everything until tax return season, and would pay it off.  Ah, looking at my credit report, there was a whole lot of green.  But, building credit is slow, like building a house. 

But it is a straw house people.  Slow to build up, fast to fall down.  In the years between 2007 and 2012, I had only built my credit from 0 to around 700.  In 2012, I was forced out of my job, and I had enough savings built that I could hold on, but homelessness does not help the issue.  But, I was unable to keep up with everything that had been happening, fees and penalties just beat me up.  My own fault really. 

So, trying to avoid all this stuff from hitting the fan, I ran down and applied for a job.  The joys of credit.  Did you know when a company requires a Homeland Security Background Check for employment, you go through a more through criminal background check, along with a work history check, and a credit check.  In order to pass that credit check you must have a score of 570-600.  If you are not above that score, you might as well forget that job.  Not a problem, except most employers now require that type of check for even the lowest paying jobs.

That means you have to find someone, somewhere willing to hire you without that check.  Alright, but in the meantime other lovely things start happening.  The lower your credit score the higher your home owner, and car insurance becomes.  Yeah go figure, apparently if you have bad credit you are a thief, who will burn down your car or home just to get out of paying for it. 

On top of that, those interest rates you get on credit cards, mortgages, car loans/leases, rent, and personal loans increases.  Thats right, the lower your score the more you pay.  See a problem here, the people who really need it, pay more for it, because they are deemed a risk. 

But, I have kept my truck payments up, luckily I could fall back on my parents to cover it for me.  My insurance company decided I was not that big of a risk, as my dad became a co-owner with me, and most of his income is secure.  But as it was, I experienced a severe drop in credit score, I mean the bottom just fell out of it like a penny dropped from orbit.  So, here we are, good standing from 2007 until the end of 2012, then it wasn't really bad, it was rough, but not bad until the middle of 2013, when it tanked.  You can see where I tried, and failed, but the system does not take into account trying, only pass or fail.  I failed, in epic flaming fashion.

Of course I was told today that we all have a right to place a brief statement on our credit report to explain the situation to anyone looking, but with things so black and white with credit these days, it is pass or fail, no in-between.  You need credit to do just about anything these days, which means you at some point are going to be treading very close to living outside of your means.  And that is a major problem.