Financial_Crisis

"Of mankind we may say in general they are fickle, hypocritical, and greedy of gain."--Niccolo Machiavelli. It is extremely apparent that lenders are only in this business –consumer credit lending– for the money and do not care that they are not fulfilling their federal-given duties to the public by assisting them in their daily lives, and instead are denying them the ability to use consumer credit due their unfortunate faulty credit scores. If only lenders could reach out further to investigate the actual financial situation of a given consumer – be it students or credit newcomers – aside from their damning credit score, they may see that the particular said credit score is the haunting skeleton in the closet that overshadows the true day-to-day capabilities and responsibilities of citizens and their true financial duties. By not giving fair estimation to all possible consumers, it is further exacerbating the financial crisis in the country. According to the Federal Reserve and the FDIC, it is common for lenders to make a game of their work to compete for a wider range of customers by using the low-cost credit scoring system (FDIC, n.d.). In other words, they see how many rich customers they can find with perfect scores to make themselves look great, and it is little to no cost risk for them since credit scores are a cheap method of evaluation (no manpower needed, just computers). The only problem with that is the wealthy do not need the help of lenders as do the middle and lower class people of America. Why would lenders seek out wealthy clients when the country is positively swarming in abundance with financially struggling families begging, pleading, and praying for a second chance to receive help for themselves and their families' It seems quite ridiculous when you think about it, and even more so proves that lenders do not care about everyone, but instead only those who benefit them in their place of employment and further gain them success and notoriety within their field of work and play. Students of all ages go to college for one thing: a higher education to keep them afloat in the challenging world we live in. Everyone knows the majority of college students live week to week on limited and insufficient funds and often work two or more jobs just to make ends meet while pulling all-nighters to achieve that ultimate A+ and four-point-oh. You would think they could obtain a credit card easily, as they do not want to use it for erroneous purchases -- merely gas and food would do just fine, I am sure. Unfortunately for these students, they cannot receive help from lenders concerning loans or credit cards. Why is that, you may ask' Yet another pathetic excuse to add to the pile: Their credit is too new, meaning there is not a firm foundation for evaluation of risk by lenders as the student is just starting off (Fico, 2001 – 2011). That is apparently an acceptable reason for the lenders, but if the lenders do not give the students a chance to establish anything on their record, how will students ever get their hands on a credit card, as in order to get credit, you must have credit' They will not. Thus they continue to struggle day-to-day on hope alone that their lives will continue successfully and hopefully improve although they have very small forms of means to survive the harrowing job of living independently in this hustle-and-bustle world. Many consumers in America have low or poor credit scores due to the tragic upheaval in the economy in recent years, and it is not necessarily a fair reflection on their character and financial abilities to date. Parents have to decide whether to put food on the table for their children or pay their Visa card bill; families have to pay their gas bill over the enormously disproportionate interest rates on school loans due. It is a crisis we are all involved in, regardless of our innocence or fault in creating it, and the credit lenders of this country are not being accommodating in the least in these times of tough choices and vulnerability for the hard-working citizens of this grand country, built on the belief of getting what you deserve from the government after paying taxes. Sources say both judgmental systems and credit-scoring systems just assume that the past experience (credit score) can be used to predict future financial performance for the said individual but not with certainty. So why do they rely solely on a credit score, when it is truly only a small portion of what genuinely occurs in consumers’ lives' Well, of course it is so they can say NO and save themselves any possible risk at all, disregarding simply that their very jobs are to take risks. Creditors are not able to reliably gauge the credit risk posed by individuals, and “they do not wish to spend the time or money required to gather additional information…. such individuals may find it much more difficult to obtain credit or receive it on the best terms available.” (Federal Reserve, 2008). It is, simply put, immoral and corrupt to judge people based solely on their credit score, and the laziness of the government to instate more flexible rules and regulations for lenders and their customers in dire need is sadly only rising. Are they doing their jobs correctly, efficiently, and loyally' Do they look at other avenues in a person’s life besides a credit score to help them in any way they can' No, they do not. Credit scores are critically oversensitive, overrated, and overused – against hard studying students, hard working newcomers to credit, and not against the wealthy. There is a complete and utter economic crisis in this country and anyone who thinks denying the majority of us money and aid when our very survival and existence depends on it, is ignorant, cold-hearted and clearly blinded to the realities of life today in this hard, cold world. Federal Reserve. (2008). Report to the Congress on Credit Scoring and Its Effects on the Availability and Affordability of Credit. Retrieved from http://www.federalreserve.gov/boarddocs/rptcongress/creditscore/general.htm FICO. (2001-2011). My Fico. Retrieved from http://www.myfico.com/crediteducation/ Electronic Privacy Information Center. (n.d.). EPIC . Retrieved from http://epic.org/privacy/creditscoring/ Federal Deposit Insurance Corporation. (n.d.). FDIC. Retrieved from http://www.fdic.gov/news/news/financial/2005/fil1405a.html