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No More EZ Credit?

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http://www.chron.com/disp/story.mpl/front/6054392.html

This article in the Chronicle is suggesting that the obvious near-term lack of easy credit may be a sign that the days of easy money are over. Since I haven't used a credit card in 3 1/2 years, and haven't applied for a loan in 5 years, I realize that I am not the one to make an informed comment on the topic. Has anyone noticed tighter standards recently? Or is everyone like me and not even trying to get a loan?

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we were talking this very subject yesterday. a broker was telling me that some of his potential customers are being monitored more closely. more are being required to put money down but i believe that FHA was still doign some 100% loans if i remember correctly.

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In the last year two of my four credit cards changed their terms significantly enough that I had the option of closing the accounts and paying them off under the old terms. I believe I have a good credit score (though I've never checked) because I haven't missed a bill payment in 15 years, so why the credit card terms changed I don't know.

I used to get lots of credit card offers in the mail, but those have trickled down to maybe three a week now, plus the twice-monthly offers from my current credit cards to transfer balances from my other non-existent credit cards.

I think consumer credit is tightening up. While it will be hard for people going through rough times (divorce, major illness, death in the family, college, moving, etc...) I think in the long run it will be good (more personal accountability, fewer crappy commercials on TV).

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I hope a couple of things come out of this. I hope there are stringent, across the board guidelines set forth, to but to rest all the gray area that is dwelled upon, in the name of getting that commission. Just plane ole cut and dry, either you qualify or you don't, especially on loans involving homes and peoples homestead. Make it easy to determine how much you qualify for, based on your net income. Whatever happened to the Debt sheet you use to have to fill out, that figured out on paper, what you had available, with your current bills before you take on more. Make a person really qualify for a loan, and make the lender follow up with verification.

I also think the current FICO system is severely flawed, and way to open to too much bad info, and interpretation. It needs to be readily accessible to the consumer to which it belongs, and their should be a government committee or Board, that you have to turn to for some form of relief, when you are being incorrectly reported and or being treated unfairly. The 3 major national credit bureaus all have too much power over people financial well being, without any oversight whatsoever. They can report whatever they want, then you have to fight for months to get anything corrected, and even then it doesn't always help. They need a set scoring system that has stringent guidelines and a ruling authority for oversight, and relief to the consumer, if need be, for any wrong doing n the part of the big three.

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Makes me wonder if an end result will be certain sectors of retail scaling way back. I've always thought furniture retailers to be the absolute bottom of the barrell with the incessant 'no money down/no payments/no interest for 2 years ' come ons. They are basically waiting for people to miss the pay off at the end of the term, and then slam them with back interest at 21%. I wonder if anyone pays cash for furniture anymore. It sure doesn't seem like it. If Rooms to Go, et al were to go out of business forever, I certainly wouldn't shed any tears, the advertising is that irritating. I looked at a paper Chronicle, and the front section was nearly all furniture ads.

Furniture, cars, appliances, all the big ticket items that people buy on cheap easy credit, and usually don't need, but want an upgrade--it's been a part of the consumer spending engine, but also a very weak link.

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I was thinking last night how badly this hurts Mattress Mack.... His whole business model is to borrow money cheaply and then lend it out at exorbitant rates to people to buy cheap furniture. Not only is it going to be harder for him to get capital to lend, many of his customers likely won't be willing (or won't qualify per his own tighter standards) to play that game anymore. Ouch.

The topic of this thread is also handy - this is exactly the way I've tried and explain the entire financial situation to my parents and others: imagine how much less furniture/applicances/cars people are going to "buy" if they already don't have cash saved and now can't get credit to buy it now and pay it off as paychecks come rolling in? Now think about entire multi-billion dollar companies doing business is almost exactly the same way (like Mattress Mack does) and you'll see why all of the people on TV are now panicking.

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Old topic, but I am only just recently facing my own personal credit crunch and am looking for some advice. I recently inherited a small amount of money that I was able to use to pay off about 75% of my credit card debt. GREAT! you say. Well, I thought the same until I received letters from 2 of the cards, stating they were lowering my credit limit to within about $200 of my new unpaid-off balance, thus making it look like I am using 95% of my available credit, thus ruining my credit score. My FICO has gone from well above 750, which I was quite proud of, to, last I checked 702. NO late payments, NO over limit, really nothing I can think of to make this happen. Call them on the phone, they say it's just the "market" and "nothing you have done negatively". So, screw 'em. I'm paying them off with the rest of my inheritance. Will they now take my limit to ZERO? My only concern is the FICO score, as I will soon be buying a car and want to get the best rate I can. Anyone have any ideas how I can up my score without opening more credit accounts? Or any advice at all to make me feel not so screwed?

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Old topic, but I am only just recently facing my own personal credit crunch and am looking for some advice. I recently inherited a small amount of money that I was able to use to pay off about 75% of my credit card debt. GREAT! you say. Well, I thought the same until I received letters from 2 of the cards, stating they were lowering my credit limit to within about $200 of my new unpaid-off balance, thus making it look like I am using 95% of my available credit, thus ruining my credit score. My FICO has gone from well above 750, which I was quite proud of, to, last I checked 702. NO late payments, NO over limit, really nothing I can think of to make this happen. Call them on the phone, they say it's just the "market" and "nothing you have done negatively". So, screw 'em. I'm paying them off with the rest of my inheritance. Will they now take my limit to ZERO? My only concern is the FICO score, as I will soon be buying a car and want to get the best rate I can. Anyone have any ideas how I can up my score without opening more credit accounts? Or any advice at all to make me feel not so screwed?

I'm facing the same thing with my credit card. I paid down a sizable portion and then the "limit" shrinks accordingly within a few months. I'm making massive payments, and I'm wondering if they will continue to shrink it. I don't expect to use the card much in the future (kiddo is using it, actually), but if a squeeze comes up (Car repair, etc) I'm wondering what's going to happen then. I have a good amount of liquid assets, but I prefer not to use them if I can.

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So, take the advice of Dave Ramsey. Buy a piece of junk for you, and your wife to ( try ) to drive ( When it's running ). Go to a pizza delivery service - right now!!!!... and get a job delivering pizza, all parallel to your current job, and, in addition to taking care of your kids, friends, and relatives. Eat beans and rice for every meal, use candles instead of turning the lights on ... well, you won't have to worry about that, because you won't be home. Live at the Star of Hope Mission until you can pay cash for a house. Don't take a vacation, or go out to eat EVER!!! There you have it... see how easy that was?

This is really a serious problem for anyone, as we all need credit from time-to-time, and a good credit rating is more important now, than it was a year ago. Quite frankly, I'm not going to let my wife drive a piece of junk, no matter what. It is not only dangerous for her, but she is a beautiful woman. Seeing her drive a junker, would be like stripping her makeup off, and putting her in a worn out dress. No way Dave!

My philosophy has always been to manage money wisely, regardless if it's my cash, or someone else's. Seems to work fine.

I can tell you that from a business standpoint, even if you've dealt with the same bank for many years with good credit, they are all very scared right now. You have to justify the applications using different approaches, and as Cottonmather0 stated, it will be toughly scrutinized. However, I can tell you that Mac is NOT in trouble with interim loaning.

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I like to think things aren't that bad, that I'd have to go the Dave Ramsey route, however, once this debt is gone, I don't plan on accruing much in the future but that's not really the point. It's like Ricco67 said, I like to have a standby in case of emergency. I'm growing my liquid assets, but really don't want to touch that, either. And I see it as an affront to my personal integrity. I borrowed the money, I paid(am paying) it back per the agreement. I've done nothing wrong! I know they are crooks and I got myself into it, but changing the rules mid-play, is just so slimy.

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I know they are crooks and I got myself into it, but changing the rules mid-play, is just so slimy.

So change the rules back into your favor. Don't pay it off. Let the card debt go into default. In seven years, assuming no other creditor has purshased your debt for a cut rate from the original lender, you'll be free and clear. You can beat the lenders, it just takes time.*

*In no way do I actually encourage this, though I know from first hand experience it works.

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So no more ads with "Home of EZ credit" slogans? blink.gif

Dave's approach overall is good for many people that need awakening but I can't agree with his philosphy that ALL credit is bad. ph34r.gif

Edited by JJVilla

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So no more ads with "Home of EZ credit" slogans? blink.gif

Dave's approach overall is good for many people that need awakening but I can't agree with his philosphy that ALL credit is bad. ph34r.gif

I've listened to his show for a few months before it hit TV and I have to say that some of his advice to saving is good, but you have to be of some financial (but dire) means to pull off his "free of debt" goal.

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