June 21, 2016
How We Feel About Credit Scores
WalletHub conducted its 2016 survey of American knowledge and opinions of credit scores and interviewed me about their findings:
What is your reaction to one-third of survey respondents believing that anyone can access their credit score/report, as if it is public information?
Given the complexity of the consumer finance industry, it is not surprising that many consumers operate in a fog of ignorance and misunderstanding about their rights and how the industry operates. Some people may be aware that many businesses can access their credit report and that many businesses contribute to their credit report, both without the clear consent of the consumer. This all leads to a sense that their financial profile is out of the consumer’s hands. And while that is not technically correct, there is a lot of truth to it. Decisions are being made about you — what interest rate will be offered to you, whether you will receive a loan, will a bank open a checking account that you applied for — and you only have a partial sense of the criteria upon which they are being made.
Why do you think 49% of people would not marry someone with bad credit?
People understand that bad credit can have a big impact on life choices — can we buy a house or a car? That can influence decisions about the suitability of a spouse as much as other financial concerns, like the job the potential spouse has. Credit scores are also being used for decisions other than whether to extend credit to someone — for instance, by landlords deciding whether to rent an apartment. These expansive uses of credit scores foster a sense that credit scores act as a broader judgment of the potential spouse, like a gauge of moral worth.
Why is money our leading societal stressor?
We live in a society that has become more divided between haves and have-nots over the last few generations. The gap shows up in the big difference between the number of people at the top (a small percentage) and the bottom (a large percentage) of the distribution of income and wealth. It also shows up in the difference in the amount of money that puts you at the top and bottom — the rich have gotten richer and the poor still have very little in terms of wealth and income. Money gets seen as being able to determine destiny and thus it stresses people out, particularly because the American safety net is not as tightly woven as those of other developed countries.
Why do you think people would prefer to be overweight, to have bad eyesight and to be going bald than to have bad credit?
Henry Kissinger has said that power is the ultimate aphrodisiac and Marilyn Monroe (in “Diamonds Are a Girl’s Best Friend”) has sung that “A kiss may be grand/But it won’t pay the rental.” Money is power, and in the age of Matthew Diamond’s “Evicted,” being able to pay the rental is a pretty attractive quality.
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