Originally Posted by DVPGSR
I am not arguing that they are abusing the system. My question is, what company is going to extend a person a line of credit for a car or credit card when they have no means to pay it off other than a monthly welfare check? Companies are there to make money, if they know you cannot repay a loan there is no money to be had in extending you the credit irregardless of the credit score.
They love those kinds of people because they make more than their money back on the loan or credit line.
When people default or fail to pay they repo the item and sell it again, usually for much more than is owed on the item.
Take a look at places like Rent-A-Center who make killings off of people in these situations. It allows them to look like they are on top of the world for $35 a week for one year...when the time is up they have paid more than the item is worth and also have a small balloon payment to take possession of the item.
Credit is not hard to build in this manner really. Get a basic credit card with say a $250 limit, charge $10 every month on it for a year and pay it off on time making only one mildly late payment, after that year if not sooner they will extend your credit guaranteed.