The credit score saga !

If you have lived in the United States, a lot of your thoughts would surround around the 2 words : "CREDIT SCORE".

Maintaining a good credit has become equivalent between poverty and survival in this country.

Your credit score is supposed to show on how you fare in paying off your credit card bills and managing your finance

The question is whether the credit score system is a good system.






From personal experience, some of the cons that I see on the system are :

• Students who pass out of college with a heavy student load of around 30 000 $ and don't end up finding a decent job which pays at least 50 000 $ per annum in 6 months,life is going to be hard for them.They are forced to work multiple part time jobs to make ends meet.They are sucked into the credit system at a young age.This kind of a vicious system doesn't allow you to pursue fields like arts and creativity which involve a longer period for a person to establish.
• The credit system makes it difficult for you to go on a sabbatical or make a career switch as your score would take a deep plunge the moment you stop paying the required credit card payments and the bank balances go down.
• If you go through a divorce and end up paying child care support and a heavy alimony,your finances could be ruined which in turn could nose dive your credit score in a short amount of time.The financial pressure could break a person and make him or her depressed and feel left out.
• Parents discourage children from staying with them after they turn 18 as they don't want their credit scores and finances to be affected by standing as guarantor for loans for their kids.This breaks the bond between kids and their parents.Kids don't care a hoot for their parents especially if the parents don't share their college or dorm fees.

Supporters of the system argue that :

• The system works well for a person or family who is financially stable.The system ensures that you pay your bills on time and manage your credit cards well.

The question we should be asking is ,shouldn't we move emphasize more a DEBIT Score rather than a Credit score?The debit score could look into how much you try to save per month or paycheck once you settle in your career.The idea should be to encourage individuals and families to save rather than pay their credit card bills systematically.The 2 six letter words that the US would need to fix in the 21st century if they have to remain a superpower is : 1)Family 2)Savings.

The FED has so far had the luxury of printing and pumping cash indiscriminately.This cannot go on forever and would eventually require families to save.Earlier the better.The fundamental model of the US economy would change if another recession was to strike & people might switch over to the savings model rather than the consumption model.