I read this interesting comment today:
‘The credit scoring technique is primarily about highlighting and weighing up the profit and risk equation for lenders. Even someone with a good credit history may be refused credit, if it is unlikely to make the loans company enough money.’
It’s true though. All lenders including loan companies, credit card companies, banks and building societies are here to make a profit.
After all these financial companies are big businesses. They have no obligation to offer us credit.
Someone could have a really bad credit history and someone else a really good credit history. yet they could both be refused credit. One is deemed too risky, the other won’t provide enough profit. It seems those in the vicious cycle of debt are the best profit makers. Continually paying on their credit card, and yet never really clearing it at all.
We find it hard to remember that generally lenders aren’t looking out for our best interest, but how much we can offer them. What a strange world we live in.
Read the full article on Credit Scores here
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