/biz/ - Business & Finance

[Anonymous No.13218250]

Why does having a lower credit score result in higher interest rates on loans acquired with said lower credit score?

[Anonymous No.13218326]

Because the lender needs to charge more interest due to more delinquencies. They have to make a profit. If you lend to high score borrowers, then the chance of being paid back is higher. So you can charge less interest

[Anonymous No.13218370]

>>13218250
you're basically buying trust.

if you actually get the loan with shit credit, you'll actually be building credit. so the next loan you get just might be better because you have a history of managing borrowed money well.
>implying you have shit credit
>implying you actually get the loan
>implying you actually pay it back

[Anonymous No.13218403]

So the solution for lower credit scores (less likely to pay back on time) is to raise the cost of the loan making it harder to pay back?

Isn't that actually retarded?

[Anonymous No.13218417]

>>13218326
But doesn't that increase the chance of the person not paying it back? Who made these rules.

[Anonymous No.13218435]

>>13218417
Jews

[Anonymous No.13218452]

Is it too tedious to just acquire debt to income profile of prospective borrowers and decide to lend based on their ability to actually pay.

[Anonymous No.13218510]

>>13218417
Don't worry the only people with shit credit scores are those who don't need credit and blacks.

[Anonymous No.13218511]

>>13218435
Say it isn't so... :(

[Anonymous No.13218643]

>>13218403

is it retarded that pyramid schemers and multilevel marketing uses poor people to get rich?