I know very little about credit scores. I know good credit is hard to achieve and incredibly easy to lose. I know that it's impossible to have a perfect credit score and I don't have a clue why that is. Because my mom worked at a credit reporting agency for so long, I was always taught to pay off all of my bills in full each month. I've never paid the minimum amount on a credit card bill and I freak out when the Internet company loses my statement which causes me to miss the bill's due date. It's because of these things that I can't understand why people don't take their credit more seriously.
I was having a conversation with a friend I work with today and he was telling me that he had to catch the bus after his shift. Now, I knew he had a car, so I assumed it broke down or that he was loaning it to a friend in need. He then informed me that it wasn't either case; his car had been repossessed. Upon further questioning I discovered that he had simply given up making car payments because he had a suspended license and (in his opinion) it didn't make sense to continue making car payments when he couldn't drive the car he was paying for. When he received the call from his bank telling him they hadn't received a payment in a while, he told them to come and get the car because he was done with it.
I was floored. I couldn't believe someone could be so naive to think that this was the best solution to his problem. I told him that was the absolute worst thing he could have done and he said, "Oh, it's under my mom's name." I stand corrected. That was the worst thing he could have done. How could he do that to his own mother? Apparently, though, she already has terrible credit so it wasn't that big of a deal. Those were his exact words. "She already has terrible credit so it wasn't that big of a deal." Well, buddy, I hope she doesn't plan on buying anything any time soon.
What people don't seem to realize is that the government that spent billions upon billions of dollars to bail these banks out of debt is monitoring the every move these banks are making. This in turn causes the banks less likely to approve loans to people without the credibility or credit to pay the loans off. People that have "terrible credit" aren't getting the loans they used to and I don't think they understand this. Sure, you don't need a new car or a new house right now, but if you move to an apartment, you may have a hard time getting electricity sent your way if the electric company can't trust you'll pay your bills.
Normally, I wouldn't care about these people. It's their credit and it doesn't affect me. I know I have outstanding credit and I won't have a problem getting that loan when I need it, but when people in my neighborhood get this attitude about their mortgage, then it gets really annoying. You see, if you're my neighbor and you discover that you're paying more for your house than what it's actually worth and you decide to foreclose, that not only hurts your credit, but it diminishes the value of my house. It doesn't matter if I pay my mortgage each month and I have a flawless yard. If there is a house in my neighborhood that has been foreclosed upon, the value of all the houses around it decreases.
It's simple for some people to take the easy way out and just give up. I would like to say, "Do what you want," but when your actions affect me than it's really irritating. Not paying for your car is one thing. You're the only one that will have to live with the consequences of your actions. But not paying for the house because it's easier for you to get up and move away is such a weaselly move because you leave nothing but a pissed off neighborhood. I love that the banks are finally cracking down on people, but I hate how easy it is for someone to screw up something for someone else.
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