Overnight, something happened and all people's credit scores and credit histories were reset to being basically a perfect score. What kind of effect would that have on society? And how would the financial industry react to such a drastic change that COULDN'T be reversed to what it originally was?
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How would society change if everyone's credit score was reset to a perfect rating?
- Thread starter Kimawolf
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Masquerader
Member
Disaster. Probably.
Bo Knows GAF
Member
Millions of people would re-buy the houses they originally couldn't afford in the first place from the forclosure market and we would relapse into 2008.
fredrancour
Member
90 percent of the decisions that created those low credit scores would happen all over again if given the chance.
Maybe credit scores would be treated as universally poor til new ratings could be built up.
Maybe credit scores would be treated as universally poor til new ratings could be built up.
TAJ
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
It doesn't take any bad decisions to have a bad score. Inexperience (actual or because your activity isn't counted) is enough.
Masquerader
Member
Don't get me wrong, it'd be a nice idea. But it's not like people are cautious or responsible enough to deal with it properly. Greed would factor into it.
davepoobond
you can't put a price on sparks
It would just go back to what it is now
terrisus
Member
"Reset to a perfect score?"
That would imply that they start at a perfect score.
Not having any credit is a pretty difficult situation to be in as well.
Now, if you're saying "How would society change if everyone's credit score was put to the highest rating?," that would be different.
That would imply that they start at a perfect score.
Not having any credit is a pretty difficult situation to be in as well.
Now, if you're saying "How would society change if everyone's credit score was put to the highest rating?," that would be different.
SquiddyCracker
Banned
Probably not much?
Credit score and its importance vary greatly across western civilizations.
In some nations, it's a big deal, in others - not so much.
In the countries where it is a big deal, there might be more apprehension on behalf of teh banking institutions, until people start making bad financial decisions and ruin their perfect credit scores.
Credit score and its importance vary greatly across western civilizations.
In some nations, it's a big deal, in others - not so much.
In the countries where it is a big deal, there might be more apprehension on behalf of teh banking institutions, until people start making bad financial decisions and ruin their perfect credit scores.
Fixed that.
If OP means credit history were wiped out, then rates would simply bop up as institutions rebuilt records; if they don't have any information, lending is riskier.
Some credit wouldn't be extended, most would be extended at lower caps / higher rates. People would consume less, GDP falls, unemployment rises until credit market re-stabilizes.
biggersmaller
Banned
Nothing much. Mortgage lenders already are starting to rely more heavily on income/debt ratios as a metric. Credit cards are so fast-and-loose they don't need those scores to quickly limit risky customers - and would probably just raise rates on new customers.
entremet
Member
You can have a great credit score and have debt.
A credit score is about how you handle debt.
You can have a zero credit score and self finance everything and be doing better than most. If you're rich and patient enough you don't need credit. A perfect rating doesn't mean no debt, OP.
A credit score is about how you handle debt.
You can have a zero credit score and self finance everything and be doing better than most. If you're rich and patient enough you don't need credit. A perfect rating doesn't mean no debt, OP.
PrivateWHudson
Member
Can I default on all of my current obligations first? I'd not, I'd be pretty pissed off if my derelict friends were let off the hook for going bankrupt while buying crap they couldn't afford, while I've been struggling to pay my debts.
Rentahamster
Rodent Whores
People who are careless with their money/ignorant about finance would no longer have that indication that they are so. Another metric to determine lendability would have to emerge.
Perhaps, OP meant to ask what would happen if all credit debt were forgiven?
Perhaps, OP meant to ask what would happen if all credit debt were forgiven?
Stole my joke!
Agreed. I'd rather everyone's debts go to $0.
The world would even itself out in about an hour or so, credit reports on the other hand would just be thrown out and a new system put into place.
Freezasaurus
Member
Umm.... I'm sure the credit scores would end up exactly where they were before. Sooner or later. People can't change their spending habits overnight.
That's pretty much it.
IdreamofHIME
Member
It would be the 2008 credit crisis part II, straight up.
I know people with super shit credit and debt up to their eyeballs, yet when some jackass offers them a credit card at something like 99.9% APR they hop right on and go nuts.
I know people with super shit credit and debt up to their eyeballs, yet when some jackass offers them a credit card at something like 99.9% APR they hop right on and go nuts.
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