Quote:
Originally Posted by Wyllliam
I'm going off topic here my appolgies.
But why do you need to "build credit" to get a decent loan?
What i understand from this discussion is the more loans you have going and pay off on time the better your credit is. is this correct?
If so , Isn't this how the financial crisis started in the first place?
In Belgium you just go to the dealer or bank show your income of the last 3 months to show you have a stable income and of you go.
The APR is the same for everybody, but the total amount you can loan depends on your income,
To me this seems more fair and more financialy safe for everybody.
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You need to build credit to show a lender that you are a trustworthy and responsible lendee.
If you have no credit history how do they know that you will pay the money back they lend you?
If there is no credit history then the lender takes a higher risk of losing their money, therefore they want a higher return on investment.
The entire reason there was a financial crisis (in the housing market more than anything) in America was because lenders were lending money to people who could not afford the loans they were taking and/or were never intending to pay the money back to begin with.
There needs to be tight requirements on who can get a loan. There was a time when luxury cars were typically driven by people who could actually afford them. Nowadays you see everyone and their dog driving luxury cars.