Should you really have that line of credit?
By: Darrell Castle
If you’re struggling with bills you just can’t pay and are falling further and further in debt, you should consider filing for bankruptcy. For a FREE financial consultation, call my office at (901) 327-2100, or fill out one of the contact forms on this page.
Video Transcript
Hello this is Darrell Castle, I’m an attorney licensed to practice law in the state of Tennessee. On this video today, I’m talking about credit scores and the government’s regulation of credit scores through its new Consumer Financial Protection Bureau.
Now, the leading financial credit agency that most companies use – 90 out of the top 100 use it – is called FICO. And that agency processes about 10 billion credit per year. Studies have shown 90% without any error, so it’s a pretty good and pretty accurate representation of a person’s financial picture and his credit worthiness.
Now, the new protection agency that the government has formed has decided that a company should essentially raise the credit scores of those who have debt they are unable to pay – debt, like medical bills, that they are “not responsible for.”
So, if you had a subprime credit score of, lets say 660, this might add 25 points to your score, taking you up to an area where you may be qualified for credit that you would not otherwise be qualified for.
Now that sounds like a good thing – a good idea – because you can get credit that you’re not otherwise qualified for, but let me ask you something – if you have bills right now that you can’t pay, is it really a good idea to give you MORE bills? Is it really a good idea for you to be squeezed into a loan for a home that you can’t afford – a home that might end up upside down, meaning you owe more than it’s worth? Is it really a good idea to buy things that you don’t have the credit score to support?
I don’t think that’s a good idea at all, folks. I think it leads to trouble and I think that the road to bankruptcy is paved with such decision.
Instead of doing that, why don’t you instead do something about your financial life right now? This whole picture indicates something about your financial life that needs to be looked at. Why don’t you make an appointment with someone to see the overall picture and maybe do something about the debts that you can’t pay rather than trying to incur new ones. That’s my advice to you.