Credit rating system: outdated and unfair?

TheKeyMaker

Somehow it hits me that I have a good employment for the last 4 years with good income, never missed a payment, not arrears, never overdrawn; but still get punished by 5 years old “adverse information” on a satisfied £676 CCJ. Can’t get a credit card or a service card on my account with RBS.
What about “adverse information” on the bank which just lost £28 billions ?; prepared to write off an 1 billion debt for a Russian billionaire and still retain the moral right to judge about my £676 debt paid 5 years ago?
Maybe time to review this crap credit rating system for individuals and for the banks as well?

willo65

TheKeyMaker wrote: »

Somehow it hits me that I have a good employment for the last 4 years with good income, never missed a payment, not arrears, never overdrawn; but still get punished by 5 years old “adverse information” on a satisfied £676 CCJ. Can’t get a credit card or a service card on my account with RBS.
What about “adverse information” on the bank which just lost £28 billions ?; prepared to write off an 1 billion debt for a Russian billionaire and still retain the moral right to judge about my £676 debt paid 5 years ago?
Maybe time to review this crap credit rating system for individuals and for the banks as well?

If it wasn't for people not paying their debts (ie getting a CCJ before they pay) then the banks wouldn't have had to write it off in the first place.

chambta

So the way to solve the problems in the banking system is to allow people to grant themselves credit from the banks?

RBS said today that retail banking actually made money; the problems were caused elsewhere.

TheKeyMaker

I wouldn’t really mind if the banks did satisfied their debts (repaid it back) at he same speed I have done.
But the point I’m trying to make is that for similar offence, one gets punished for 6 years and other gets an instant (and unlimited) bail out with the first offender contributing towards the bail out of the second one; gets worse because the banks keep the right to moral lecture you whenever they feel like and all that for the sake of the credit rating system!

Extant

You are missing one key difference: if the banks are not "liquid" and stable, the economy is screwed. Hence the situation you are seeing at the moment. If you are not liquid and stable, you are screwed.

Economy > you.

More over, it's not as though there won't be punishments for the key offenders in all of this. A lot of traders have lost their jobs, there's increasing pressure around bonuses... and do you think Sir Fred Goodwin is going to be getting many job offers any time soon?

There's no moral lecture involved. A bank's primary responsibility is to generate profit for their shareholders, and they're not going to do that by giving out credit, or potential access there to, willy nilly. A risk decision needs to be taken, and to get the bigger picture, we rely on credit reference agencies - customers do not share everything when prompted.

Even without CRAs, we would still make risk decisions. That's not going to change. CRAs exist because we make risk decisions, not the other way round. There's immense value in their services, allowing customers access to a wider market of providers without having to rely on a standing relationship with the providers, opening up competition and resulting in better deals for customers.

CRAs also have some way to correct their information, if it's genuinely wrong: be it writing to them or through the provider giving the wrong info, etc. However, their info about you is not wrong: you did have a CCJ. Even without the CRAs, you would not get what you want, based on that fact - regardless of how unfair you think it is.

TheKeyMaker

I understand the pressure your profession bares on you in this moment, and I do understand the rush you have to stand up for the banks, but the Credit Rating System is Crap!
To understand my point you do have to have to add to your lexicon keywords like; Standard & Poor’s, Moody’s, Fitch Ratings, etc. Ring the bell? - Correct: These are part of the second component of the Credit Rating System, which I also had in mind … and I would not advise taking me outside of the scope of the economy lifecycle because for peoples like me, who have jobs (or had) and did take the money to Iceland Banks, or bought shares from RBS and Barclays for that matter, based on other part of the Credit Rating System, which some of us intend to ignore - that is also part of the economy!
There’s an equation of two components, which suppose to balance the credit rating from both sides …
Try to get out of that box, and for once have a look not only at he Willy Nilly who allegedly doesn’t want to share the info about his CCJ with a responsible banker trying very hard generate profits for their shareholders… and look at the outrageous un-professionalism, and greed culture of the bank community… the disproportion of the unbalanced system does carries out he unfairness of the ALL Credit Rating System …
By the way, last time I’ve checked the Willy Nilly still was making money for the bankers at the retail desk … and to be fair, let check where all the bank losses came from:
My numbers say, not from the retail desks!

PROLIANT

willo65 wrote: »

If it wasn't for people not paying their debts (ie getting a CCJ before they pay) then the banks wouldn't have had to write it off in the first place.

If you have a satisifed CCJ that means you have paid it, the debt has not been written off in this case.

CLAPTON

TheKeyMaker wrote: »

I understand the pressure your profession bares on you in this moment, and I do understand the rush you have to stand up for the banks, but the Credit Rating System is Crap!
To understand my point you do have to have to add to your lexicon keywords like; Standard & Poor’s, Moody’s, Fitch Ratings, etc. Ring the bell? - Correct: These are part of the second component of the Credit Rating System, which I also had in mind … and I would not advise taking me outside of the scope of the economy lifecycle because for peoples like me, who have jobs (or had) and did take the money to Iceland Banks, or bought shares from RBS and Barclays for that matter, based on other part of the Credit Rating System, which some of us intend to ignore - that is also part of the economy!
There’s an equation of two components, which suppose to balance the credit rating from both sides …
Try to get out of that box, and for once have a look not only at he Willy Nilly who allegedly doesn’t want to share the info about his CCJ with a responsible banker trying very hard generate profits for their shareholders… and look at the outrageous un-professionalism, and greed culture of the bank community… the disproportion of the unbalanced system does carries out he unfairness of the ALL Credit Rating System …
By the way, last time I’ve checked the Willy Nilly still was making money for the bankers at the retail desk … and to be fair, let check where all the bank losses came from:
My numbers say, not from the retail desks!

I agree that the current credit system is wrong.
It's simply complete madness that 'ordinary' peopl consider that getting credit (except for property) is actually normal.
We need to move into a culture where debt is seen as unacceptable.. maybe not quite criminal but certainly not what normal respectable intelligent people do.. maybe OK for the underclass who can't manage their affairs

Or maybe a live time credit allowance .. say 10,000 is the maximum total livetime borrowing so if you borrow two lots of 5k in your twenties you can never borrow any money again... it would have saved hundreds of thousands of people from shocking misery over the last ten years and a great many more over the next 5 years.

I exclude property borrrowings and borrowing for business investment.

Kavanne

chambta wrote: »

RBS said today that retail banking actually made money; the problems were caused elsewhere.

. I make loads of money for the bank, personally! lol

Lansdowne

As I understand it, the Credit agencies hold information (hopefully accurate as inthe CCJ case) and the banks decide how to make use of it.

I would suggest Banks are justified in using this information to decide whether someone is a good risk. But much less justified in using it to decide whether someone will be a profitable customer, for example, refusing an ordinary bank account (such as refusing the RBS servicecard/ cash card).

I agree with anyone who says

CLAPTON wrote: »

It's simply complete madness that 'ordinary' people consider that getting credit (except for property) is actually normal.

Be careful about the '(except for property)' though. What got us into the current mess was people in US/UK considering it their right to access a mortgage, whatever their circumstances, and the banks etc being happy to oblige.

CLAPTON

Lansdowne wrote: »

As I understand it, the Credit agencies hold information (hopefully accurate as inthe CCJ case) and the banks decide how to make use of it.

I would suggest Banks are justified in using this information to decide whether someone is a good risk. But much less justified in using it to decide whether someone will be a profitable customer, for example, refusing an ordinary bank account (such as refusing the RBS servicecard/ cash card).

I agree with anyone who says


Be careful about the '(except for property)' though. What got us into the current mess was people in US/UK considering it their right to access a mortgage, whatever their circumstances, and the banks etc being happy to oblige.

Yes .. I agree with your sentiment and agree one must be cautious. Realistically, however, in the UK it has proved sensible to buy a property. Its only really the silly salary multiples (4-5 x joint income) and mortgages over 90% LTV that have caused the current madness.