Credit: One of the Remaining Great Disqualifiers

Credit: One of the Remaining Great Disqualifiers

 Burning Card

Throughout the course of my life, I have learned that there are still a few disqualifiers that make it difficult for many people to live the lives they want. A quick history lesson can set up the concept of disqualifiers. In the past (not today of course), disqualifiers were gender, race, religion, sexual orientation, and economic status, just to name a few. If you were on the wrong side of one or more of these things, you could have been disqualified from something our society had to offer. That was then, not now!

At this point, one must ask why were disqualifiers set up and used in the first place. Didn’t the Declaration of Independence and US Constitution clearly spell out the rights of all American citizens? The obvious conclusion is there has always been a reason to disqualify people. There has always been a reason to separate people. There has always been a reason to exclude people. There has always been a reason to disqualify people. Eventually the legality of many of these disqualifiers came into question. In time, most of these disqualifiers became illegal so people could not be so easily excluded.

Now you would think that with all of the barriers that disqualified so many taken away, more people would be able to make progress toward their dreams and goals. Yet there is a growing segment of people in our society who are just as far away from their goals as ever. Why is that? I believe it is because disqualifiers still exist today. These disqualifiers are more subtle, and much harder to try and overturn in our courts of law. One of these disqualifiers that need to be revealed is credit (personal finance).

By adulthood, most people have discovered that credit “makes the world go round”. If that discovery happens after mistakes with credit, people quickly learn that our credit is one of the remaining great disqualifiers. Simply put, once you make mistakes with your credit, it is very hard to erase the effects of those mistakes. If you do not understand the nature of the problem and continue to make credit mistakes, you can easily dig a hole that will take years to overcome. Unfortunately, many never overcome their credit issues. For them, credit becomes a lifelong disqualifier.

Think about it, if you have poor credit you are disqualified from a lot of things. You probably pay higher for your insurance, because poor credit HAS TO MEAN you are a risky person. If you have credit cards, you are being charged a higher interest rate, because poor credit HAS TO MEAN you are irresponsible. Did you buy a car or house? If so, you are paying more than someone with good credit, because poor credit HAS TO MEAN you need to pay more just to prove your worthy of receiving the loan you got. With more jobs requiring credit checks, there is a possibility that you missed out on one, because poor credit HAS TO MEAN you would not make a good employee.

These are just a few examples of how poor credit can disqualify you for low rates, and in some cases, prevent you from consideration at all. The sad part about it is so many people are blind to this issue until it is too late. Most of the time, the people who are oblivious to how credit works are the SAME people who were disqualified for so many years in our society: the poor, minorities, women, and immigrants. Let that sink in for a second. Now think about this: many of the reasons why these people were previously disqualified have been ruled illegal, thanks to our undeniable rights and the court systems that uphold them. Now, these same people are being disqualified for things that ARE LEGAL and hard to fight against in our courts of law. Credit is one of these remaining disqualifiers.

The question I have is why is this allowed to happen?  I believe that is the real issue: people are not taught about credit and personal finance. Without guidance, too many people are doomed to make mistakes with their credit. which will disqualify them at different stages of their lives. It drives me crazy because there is a simple fix to the problem. Why do we allow a lack of knowledge to disqualify people? Why don’t we teach our ALL OF OUR CHILDREN about credit during their formal education?

I know there are hundreds of schools that do teach about credit, or some level of financial literacy. Maybe they teach about balancing a checkbook. Maybe they teach about interest rates. Maybe they teach about personal finance. However, I know for a fact, that hundreds of schools DO NOT teach our students about these things. To me, personal finance and credit management should be mandatory classes in both grade school and high school. I went to decent schools, but I only received minimal (if any) information about personal finance and credit.

I am not one to neither throw out conspiracy theories nor pull the victim card out of my pocket, but this issue makes me wonder. Millions of people struggle with their credit, and poor credit disqualifies so many of them. Everyone is entitled to free public education, yet credit and personal finance is not a part of that education in many schools. It seems like a no-brainer: teach students how to use credit properly, and less adult will make mistakes with their credit, which will disqualify them from things our great society has to offer. Yet this is not being done during the formal educational process!

Here is my conspiracy theory: the system of finance and credit HAS TO HAVE a certain amount of people who mismanage their credit. If everyone knows how to manage their credit AND more people did it right, it would cause our financial systems to collapse. I know it sounds crazy, but to me it also sounds crazy to try to disqualify people because of gender, race, religion, sexual orientation, and ECONOMIC STATUS. Wait a minute, poor credit leads to poor economic status for millions of people!

So I want to know, why is credit one of the remaining great disqualifiers?

 

Be on the lookout for my next post… Education: One of the Great Disqualifiers

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2 thoughts on “Credit: One of the Remaining Great Disqualifiers

  1. dkmathstats

    I think the financial system exists for people who do not have enough cash on hand for “large” purchases. Why pay now when you can get it now and pay later (with interest)?

    I do agree that people with low credit scores are risky customers. Risky in the sense that based on historical and statistical data (I would assume), the borrower has not had a great history in paying bills, loans, etc. The score is a reflection of the borrower’s “past” and prediction of how likely he/she will pay bills.

    With Apple Pay and Android Pay coming in, there are now more options for non cash payment methods. How will this play out? Time will tell.

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  2. Pingback: Mass Incarceration: Maybe the Last of the Remaining Great Disqualifiers | Wake Up/Rise Up! Black America

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