Originally Posted by Nightshade
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.
Companies love the people that will max out their credit card and pay the minimum. They hate the ones that max it out and never pay. Same for the car. Repoing a car usually nets less than what is owed on the car because the car has depreciated so much and is not profitable for the company but they do it because righting off part of the loan as a loss is better than writing the whole loan off.