Author Topic: Relatives who just don't get it  (Read 606089 times)

zephyr911

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Re: Relatives who just don't get it
« Reply #900 on: January 29, 2016, 08:08:35 AM »
My local CU's sig loans start at 6.99% fixed or 6.26% variable, for the best applicants. Interesting spread.
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LeRainDrop

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Re: Relatives who just don't get it
« Reply #901 on: January 29, 2016, 11:41:02 AM »
Even though it would be more interest per month paid to get a cc advance, it's still less total expenditure and paid off in shorter time. And the bank that we both use gives personal loans with decently low rates (4-5%) for people with bad credit scores.
Holy shit, what? I can't get under 10% with good credit at USAA.

Where's this?
MainSource. It's a "local" bank to Ohio, Indiana, Kentucky, and Illinois. My wife got a 5-point-something % loan for $4000 to buy a used car with no credit.
To be fair though, I have decent credit and my wife and I have a joint account.
My mom also had pretty good credit when she opened her account at the bank, but I don't know if that would influence anything.
Still though, even if she can't get a loan for less than 20% interest, it would still be cheaper than a 30k truck with 0% interest.

Ohhh, you meant a secured auto loan, not a personal loan.  Okay, that makes a lot more sense.

JordanOfGilead

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Re: Relatives who just don't get it
« Reply #902 on: January 29, 2016, 12:08:56 PM »
Even though it would be more interest per month paid to get a cc advance, it's still less total expenditure and paid off in shorter time. And the bank that we both use gives personal loans with decently low rates (4-5%) for people with bad credit scores.
Holy shit, what? I can't get under 10% with good credit at USAA.

Where's this?
MainSource. It's a "local" bank to Ohio, Indiana, Kentucky, and Illinois. My wife got a 5-point-something % loan for $4000 to buy a used car with no credit.
To be fair though, I have decent credit and my wife and I have a joint account.
My mom also had pretty good credit when she opened her account at the bank, but I don't know if that would influence anything.
Still though, even if she can't get a loan for less than 20% interest, it would still be cheaper than a 30k truck with 0% interest.

Ohhh, you meant a secured auto loan, not a personal loan.  Okay, that makes a lot more sense.
No, I didn't.
Our branch didn't offer secured auto loans below $7000. We had to take out a personal loan.

LeRainDrop

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Re: Relatives who just don't get it
« Reply #903 on: January 29, 2016, 12:30:30 PM »
Even though it would be more interest per month paid to get a cc advance, it's still less total expenditure and paid off in shorter time. And the bank that we both use gives personal loans with decently low rates (4-5%) for people with bad credit scores.
Holy shit, what? I can't get under 10% with good credit at USAA.

Where's this?
MainSource. It's a "local" bank to Ohio, Indiana, Kentucky, and Illinois. My wife got a 5-point-something % loan for $4000 to buy a used car with no credit.
To be fair though, I have decent credit and my wife and I have a joint account.
My mom also had pretty good credit when she opened her account at the bank, but I don't know if that would influence anything.
Still though, even if she can't get a loan for less than 20% interest, it would still be cheaper than a 30k truck with 0% interest.

Ohhh, you meant a secured auto loan, not a personal loan.  Okay, that makes a lot more sense.
No, I didn't.
Our branch didn't offer secured auto loans below $7000. We had to take out a personal loan.

Hmm, interesting.  I stand corrected!

Apocalyptica602

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Re: Relatives who just don't get it
« Reply #904 on: January 29, 2016, 02:58:47 PM »
Over a year and a half ago I lent my Uncle $900. He's been paying me back very very very slowly with months of silence and awkwardness in between. Today is the last $200 check I need to deposit.

... I have to call him today to make sure it's not going to bounce like the last two did. *sigh*

He's been evicted before, definitely rotates through the family borrowing money where he can. Is on food stamps and works 2 jobs (both retail). Used to work for Goldman Sachs ~10-15 years ago.

I feel for the guy but he's a shopaholic, constantly buys unnecessary things that are 'amazing deals', goes out to eat constantly. He's also closeted gay (I only know because I helped him fix his computer and saw some very obvious things) so I'm pretty sure he's spending money living a double life.

Primm

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Re: Relatives who just don't get it
« Reply #905 on: January 29, 2016, 07:00:23 PM »

You ought to 'cut the cord' and go with only the basic streaming services. That would blow the brother's mind. Or hide the TV entirely. We "cut the cord" ages ago and the rest of the extended family doesn't get it. Works for us just fine. ~$25 per month vs ~$125 month...

TV is pretty much free here. We get something like 25 free channels at last count. Yes, a few of them are home shopping network type things, but the majority have pretty good content. Enough so that you don't need to pay to get good viewing.

coolistdude

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Re: Relatives who just don't get it
« Reply #906 on: January 31, 2016, 09:43:59 PM »
A couple weeks ago my sister in law called DW to inform us that they did not want their unscratched reclining loveseat anymore. They had instead gone to Costco (I love Costco but this is nuts) and purchased a $1700 giant three piece sectional couch that overpowered their living room and made it so fat people couldn't walk behind it to the rest of the house. My BIL apologized that the reclining feature on the loveseat sometimes needed coaxing to work. After owning it for a week, I know exactly how to get the troublesome side to work without issue. Then he told me they would need to find an appropriate house for this 3 piece couch to fit. I listened sympathetically like I do at work when people complain about money to their Starbucks cup.
The good: 27 years old, 1 car, not renting anymore.
The bad: Single income, only about $17k in retirement, and no FI date.
The ugly: 1 year ago I was doing much better but lost all possessions due to mold. It has been an emotional roller coaster.

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coolistdude

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Re: Relatives who just don't get it
« Reply #907 on: January 31, 2016, 09:47:10 PM »
Another story is when my MIL informed me that they refinanced their 30 year loan (with 22ish years left) to a 40 year loan and how they are excited that it will be paid off when they are in their 90s. I very badly wanted to tell them they are counting on someone dying to pay off their house since they will be too old to work in 40 years and tired of paying a mortgage their entire lives. But I was a good son in law and said nothing. This was the same side of the family that encouraged DW and I to get a 200k mortgage for a fullplex on a 30 year with almost no down and have monthly payments of about 45% of our net takehome pay. They also encouraged us to take up horses for our kiddo. Yeah, no thanks...kid is going to have to earn it instead of us pulling out of our home equity.
The good: 27 years old, 1 car, not renting anymore.
The bad: Single income, only about $17k in retirement, and no FI date.
The ugly: 1 year ago I was doing much better but lost all possessions due to mold. It has been an emotional roller coaster.

Blog: http://bravelycontent.blogspot.com/

thatbrowncat

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Re: Relatives who just don't get it
« Reply #908 on: February 01, 2016, 12:46:19 AM »
My mom is the head of a government agency in this city. A common misconception is that people think she's filthy rich (because she looks one too! She knows how to dress and project). Unfortunately, I am one of the chosen few who knows how much she takes home. Yes, she has a big salary, BUT she's heavily taxed.

Plus, we have 2 househelpers which she sends to school, credit card balances to pay and a Toyota Wigo bought on loan.

Apparently, some of her younger siblings believe the misconception.

Her youngest sibling asked financial help 2 years ago. She asked for Php 1,500.00 for my cousin's schooling. My mom's only conditions were:
1. My Aunt furnish my mom a copy of my cousin's report cards.
2. My cousin communicate with my mom.

Unfortunately, both conditions have not been met. The last straw was when my aunt told mom that my cousin was too shy to approach mom, and could not send the report cards. My mom discontinued the support.

We also discovered that my 2nd aunt is supporting her studies in caregiving. (youngest aunt apparently told my mom that this 2nd aunt has not been sending her money);

My aunt still asks mom for the Php 1,500.00 though.

***

Then her younger brother messaged her in facebook, asking for Php 40,000 for my cousin's expenses. He would repay her on November 2016.

My mother declined, citing the car loan and the helpers she's sending to school.

But really... some relatives....

Larabeth

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Re: Relatives who just don't get it
« Reply #909 on: February 01, 2016, 10:41:50 PM »
My mom recently told me she thought my fiancee and I weren't getting a big enough house.  I didn't even know what I was supposed to say to that... I felt like we were getting a larger house than was necessary for the two of us.

Sibley

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Re: Relatives who just don't get it
« Reply #910 on: February 02, 2016, 07:58:31 AM »
The memorable purchase was the 4 copies of the same popular classic novel so that they could have one to read at home, one to keep at work, the e-book for their phone, and the leather bound collector’s edition.  Then there was the $500 on the bike that never left the house.   

Are the page numbers the same in every copy, including the e-book? Because if not, that's the stupidest effing thing I've heard all month.

Eh, I'm generally of the opinion that money spent on a book that you will cherish is money well spent. Even this isn't enough for me to change this rule of mine. I think it's funny, but I'm more curious as to what book this is that made such an impact on them. Personally though, I would just keep one papercopy, one leather-bound collector's version (if you're into that sort of thing, I'm not), and one ebook so that I have it wherever I am..a secondary copy of the office/home seems a little like overkill to me.

It's the Lord of the Rings trilogy.  I don't know that he's ever read them, but maybe he has and it was a formative experience.  I'm all for buying books, and frequently do so myself. I even buy paper books rather than lease e-books. 

I believe that the copies bought for reading are the same edition with the same page numbering.

I will confess to having multiple copies of lord of the rings over time, because I read it at least annually. My copies die. But multiple copies at the same time? That's just annoying.

maco

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Re: Relatives who just don't get it
« Reply #911 on: February 02, 2016, 10:09:09 AM »
My mom recently told me she thought my fiancee and I weren't getting a big enough house.  I didn't even know what I was supposed to say to that... I felt like we were getting a larger house than was necessary for the two of us.
Maybe she meant "I want grandbabies, dangit!"

zephyr911

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Re: Relatives who just don't get it
« Reply #912 on: February 02, 2016, 10:10:11 AM »
The second time I bought the entire Transmetropolitan series - about $100 worth of graphic novels - I decided it was worth taking up shelf space to avoid a third purchase. I'll probably re-read them every 2-3 years indefinitely.
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Adventine

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Re: Relatives who just don't get it
« Reply #913 on: February 02, 2016, 08:00:14 PM »
I have, at last count, 5 copies of Lonesome Dove. One should be thrown away. 2 are hard covers that I got at garage sales--I bought the second because I didn't remember buying the first. The 2 paperbacks are placed strategically around the house for reading (i.e. the bathroom and my bedside table); the one that should be thrown away goes with me on trips in case the book I bring isn't actually good.

How good is this book and is there any way you'd be willing to send me a copy? It's my book club's next meetup topic!

Making Cookies

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Re: Relatives who just don't get it
« Reply #914 on: February 02, 2016, 08:44:06 PM »
So how does the Lonesome Dove movie compare to the book? I think I saw it listed on Netflix.

MrsWhipple

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Re: Relatives who just don't get it
« Reply #915 on: February 02, 2016, 09:34:31 PM »
How good is this book and is there any way you'd be willing to send me a copy? It's my book club's next meetup topic!
It's a great book (won the Pulitzer, and deservedly), but so long that you probably don't want to wait for someone to ship it to you before your book club. Just get it from the library, they'll have it.

Cressida

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Re: Relatives who just don't get it
« Reply #916 on: February 02, 2016, 09:53:20 PM »
So how does the Lonesome Dove movie compare to the book? I think I saw it listed on Netflix.

Miniseries, actually (if it's what I'm thinking of). The actors playing Newt* and (especially) Blue Duck are less than ideally skilled. But it's good overall, and worth watching just for Duvall.


*Ricky Schroeder

Larabeth

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Re: Relatives who just don't get it
« Reply #917 on: February 02, 2016, 10:01:11 PM »
On the flip side though, these relatives can be great for random things.  My MiL just gave me a practically new toaster oven and saved me the $20 I was thinking about spending on Craigslist for one!  There are only two of us in my household so using the oven can be an electricity waster.

Adventine

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Re: Relatives who just don't get it
« Reply #918 on: February 02, 2016, 10:29:41 PM »
How good is this book and is there any way you'd be willing to send me a copy? It's my book club's next meetup topic!
It's a great book (won the Pulitzer, and deservedly), but so long that you probably don't want to wait for someone to ship it to you before your book club. Just get it from the library, they'll have it.

That's the thing, I'm having trouble finding it locally. I'll probably have to spring for an e-book, then. Ah well.

mtn

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Re: Relatives who just don't get it
« Reply #919 on: February 03, 2016, 07:52:36 AM »
How good is this book and is there any way you'd be willing to send me a copy? It's my book club's next meetup topic!
It's a great book (won the Pulitzer, and deservedly), but so long that you probably don't want to wait for someone to ship it to you before your book club. Just get it from the library, they'll have it.

That's the thing, I'm having trouble finding it locally. I'll probably have to spring for an e-book, then. Ah well.

Shipping to the Philippines would probably kill the option. I'd go for the e-Book. The first 100 pages or so are really pretty slow, so just make yourself get through that.

mtn

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Re: Relatives who just don't get it
« Reply #920 on: February 03, 2016, 08:01:24 AM »
So how does the Lonesome Dove movie compare to the book? I think I saw it listed on Netflix.

Miniseries, actually (if it's what I'm thinking of). The actors playing Newt* and (especially) Blue Duck are less than ideally skilled. But it's good overall, and worth watching just for Duvall.


*Ricky Schroeder

It is a miniseries. Extremely well done, too. One of the few times that I think it might actually be better to watch the movie prior to reading, because they hit just about everyone perfectly. Besides that, an all star cast--Robert Duvall, Tommy Lee Jones, Diane Lane, Danny Glover, Angelica Huston, Chris Cooper... Really, they only missed with two bigger characters--the ones you referenced above.

It might be Duvall's best work.

prax

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Re: Relatives who just don't get it
« Reply #921 on: February 03, 2016, 12:29:12 PM »
My cousin joyfully explained to me this week that she'll be getting a credit card to build credit -- I said great! Just be sure to pay it off religiously every month!

She then explained that one should always carry a balance of around 1/3 of their limit because otherwise there "isn't any money there to build credit."

PARedbeard

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Re: Relatives who just don't get it
« Reply #922 on: February 03, 2016, 12:43:08 PM »
My cousin joyfully explained to me this week that she'll be getting a credit card to build credit -- I said great! Just be sure to pay it off religiously every month!

She then explained that one should always carry a balance of around 1/3 of their limit because otherwise there "isn't any money there to build credit."

I'll be honest: I thought that this was a fact too at one time. Then, a month after I got my first card, my dad luckily sat me down and told me what a fool I was being!

infogoon

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Re: Relatives who just don't get it
« Reply #923 on: February 03, 2016, 01:32:00 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

AlanStache

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Re: Relatives who just don't get it
« Reply #924 on: February 03, 2016, 02:03:41 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

Was having a 'conversation' about all this last night with a friend who has a not insignificant cc balance.  I suggested a balance transfer to a zero interest rate card as currently about half her 350$/month payment goes to interest.  She was concerned about having more lines of credit open and that pulling her score down.  I looked it up and she may-sort-of-kind-of be right but the decrease in score would be small at worst and meanwhile an extra ~2k/year would be going towards the principle.  I really dont know what she will do, I think I know enough about the situation to make doing a transfer a no brainier, but I try to remember I dont know everything.  At one point I asked her if she would trade 50 points of credit score for 2k and she said yes without hesitation, I think she knows the smart move. 

I guess the specific algorithm being secrete keeps bad people from gaming the system ie fraud; but it also keeps honest people from making the optimal (or even ok) decision.
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slugline

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Re: Relatives who just don't get it
« Reply #925 on: February 03, 2016, 02:12:09 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I'd love to know what's "behind the curtain" on credit scores too. Mine has steadily dropped by a few points over the past several months. During that time I have had no new inquries, carried no non-mortgage debt, paid all my bills, and made all my scheduled mortgage payments. In a sane system I'd think the score would be creeping up, not down.

onlykelsey

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Re: Relatives who just don't get it
« Reply #926 on: February 03, 2016, 02:22:52 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

Was having a 'conversation' about all this last night with a friend who has a not insignificant cc balance.  I suggested a balance transfer to a zero interest rate card as currently about half her 350$/month payment goes to interest.  She was concerned about having more lines of credit open and that pulling her score down.  I looked it up and she may-sort-of-kind-of be right but the decrease in score would be small at worst and meanwhile an extra ~2k/year would be going towards the principle.  I really dont know what she will do, I think I know enough about the situation to make doing a transfer a no brainier, but I try to remember I dont know everything.  At one point I asked her if she would trade 50 points of credit score for 2k and she said yes without hesitation, I think she knows the smart move. 

I guess the specific algorithm being secrete keeps bad people from gaming the system ie fraud; but it also keeps honest people from making the optimal (or even ok) decision.

For me opening a new line wasn't significant because it was a new line.  It was significant because it really dropped the average age of my accounts (didn't really have any open until ~6 years ago, and average age dropped from 3 to 2 years.  that takes a long time to recover for. If she has a longer credit history, it probably won't matter as much.

Also, as a general announcement, creditkarma's free score will tell you what factors are "negative" and "positive".  Still wishy washy but easier to understand what's going on.

mtn

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Re: Relatives who just don't get it
« Reply #927 on: February 03, 2016, 02:28:08 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I know that my dad has a lot of open lines of credit just to keep his score up (Mortgage, mortgage (second house), auto, auto, credit card, credit card, credit card)--all of them could be paid off now, but he likes his 800 something score. Knowing him though, I doubt that it is actually costing him anything--he probably carries such a low balance on all the credit cards that he doesn't really even get a hit.

The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.


Paul der Krake

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Re: Relatives who just don't get it
« Reply #928 on: February 03, 2016, 02:29:34 PM »
Fears of credit scores dropping are so largely overblown. People see a seemingly unexplained 20 point drop and flip. the. !@#$. out. It's like they think that because it dropped 20 points this month it's going to drop another 20 points next month, and there is this evil secret banking cabal out to get them and take their homes away from under their feet. When in reality, as long as you pay on time every time, there is only so much damage you can do. Who cares if it goes from 770 to 750? You still get the top rate at every lender under the sun.

Talk about missing the forest for the trees.

Philociraptor

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Re: Relatives who just don't get it
« Reply #929 on: February 03, 2016, 02:39:38 PM »
The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.

Random datapoint: both my wife and I have credit scores right around 800 at age 26. Between the two of us we have 1 mortgage loan ($104k), 1 student loan ($65k), and 11 credit cards (all paid in full each month). We were mid 700's with the mortgage loan, student loan, and 3 credit cards mid last year. Adding 8 new credit cards somehow brought our score way up, even though the average age of credit is super low now.

onlykelsey

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Re: Relatives who just don't get it
« Reply #930 on: February 03, 2016, 02:48:10 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I know that my dad has a lot of open lines of credit just to keep his score up (Mortgage, mortgage (second house), auto, auto, credit card, credit card, credit card)--all of them could be paid off now, but he likes his 800 something score. Knowing him though, I doubt that it is actually costing him anything--he probably carries such a low balance on all the credit cards that he doesn't really even get a hit.

The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.

I think the point of credit scores is not whether you can be trusted to pay banks back on time.  It's how much money they can earn off of you as a borrower.  So they want you to pay it back, but they also want you to be in debt to them so they get interest.  It's one of the reasons using score as a proxy for employ-ability or anything else is problematic.

merula

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Re: Relatives who just don't get it
« Reply #931 on: February 03, 2016, 03:10:50 PM »
I think the point of credit scores is not whether you can be trusted to pay banks back on time.  It's how much money they can earn off of you as a borrower.  So they want you to pay it back, but they also want you to be in debt to them so they get interest.  It's one of the reasons using score as a proxy for employ-ability or anything else is problematic.

I'll give you employability, but not "anything else". Credit score is used as a factor for personal insurance, and it's only allowed to be there because it's be actuarialy vetted to be predictive of losses. People with lower credit scores have more losses, as a group.

That isn't to say that one person with a poor credit score is a worse driver than someone with a great credit score, just that it's predictive enough that (most) states will allow insurance companies to take it into account, the same as age, sex, and make of car. You don't know for sure that one particular 16 year old in a Camaro is going to be a less safe driver than one particular 40 year old in a minivan, but the data predict that, on the whole, the first group is riskier than the second.
« Last Edit: August 19, 2016, 02:03:47 PM by merula »

maco

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Re: Relatives who just don't get it
« Reply #932 on: February 03, 2016, 03:17:08 PM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I know that my dad has a lot of open lines of credit just to keep his score up (Mortgage, mortgage (second house), auto, auto, credit card, credit card, credit card)--all of them could be paid off now, but he likes his 800 something score. Knowing him though, I doubt that it is actually costing him anything--he probably carries such a low balance on all the credit cards that he doesn't really even get a hit.
Or doesn't carry a balance at all. "Pays on time every month" is all that matters on the credit cards. And if he pays off all but $10 before the statement is calculated, all the better, because his utilization'll be like 2% but he'll still get points for paying on time.

Paul der Krake

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Re: Relatives who just don't get it
« Reply #933 on: February 03, 2016, 03:25:54 PM »
I'll give you employability, but not "anything else". Credit score is used as a factor for personal insurance, and it's only allowed to be there because it's be actuarialy vetted to be predictive of losses. People with lower credit scores have more losses, as a group.

That isn't to say that one person with a poor credit score is a worse driver than someone with a great credit score, just that it's predictive enough that (most) states will allow insurance companies to take it into account, the same as age, sex, and make of car. You don't know for sure that one particular 16 year old in a Camaro is going to be a less safe driver than one particular 40 year old in a minivan, but the data predict that, on the whole, the first group is riskier than the second.
I would love to see the internal actuarial research done by insurance companies. I suspect there are a lot of other non-PC models that make actuarial sense but aren't used because the backlash against them would be a phenomenal blow to the brands.

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Re: Relatives who just don't get it
« Reply #934 on: February 03, 2016, 03:43:30 PM »
I would love to see the internal actuarial research done by insurance companies. I suspect there are a lot of other non-PC models that make actuarial sense but aren't used because the backlash against them would be a phenomenal blow to the brands.

Sounds like something out of Freakonomics, like how Roe v Wade led to a decrease in crime 18 years later.

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Re: Relatives who just don't get it
« Reply #935 on: February 03, 2016, 03:46:42 PM »
I've got a score in the upper 700s with no mortgage. Wife's is similar, albeit slightly lower. Always paid on time and now have credit in the $80k-$100k range which seems insane to me. I also give 0 fucks about what my score is since its high enough for the best rates whenever a mortgage happens in the future.

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Re: Relatives who just don't get it
« Reply #936 on: February 03, 2016, 04:43:08 PM »
My cousin joyfully explained to me this week that she'll be getting a credit card to build credit -- I said great! Just be sure to pay it off religiously every month!

She then explained that one should always carry a balance of around 1/3 of their limit because otherwise there "isn't any money there to build credit."

I read this and immediately picture the evil credit card people spreading this rumor with a gleeful mischievous grin. :p

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Re: Relatives who just don't get it
« Reply #937 on: February 03, 2016, 07:01:12 PM »
My cousin joyfully explained to me this week that she'll be getting a credit card to build credit -- I said great! Just be sure to pay it off religiously every month!

She then explained that one should always carry a balance of around 1/3 of their limit because otherwise there "isn't any money there to build credit."

Explain it to her!  Also explain to her that she will lose buckets of money by carrying a balance...

I have mine set up to pay in full from my checking each month on the due date.  This took a long call to the credit card company
Rep: "How much did you want to pay per month?  The minimum?"
Me: "In full."
Rep: "In full up to $400?"
Me: "The total balance due, even if it's really high."
Rep: "Umm, okay.  Entire balance.  I don't think I've ever had anyone want that before.  Make sure to check the text on your next statement to see if it went through all right."

I know the automatic payment would cause some to ignore the bills and overspend, but it is a great boon to me.
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Re: Relatives who just don't get it
« Reply #938 on: February 04, 2016, 07:38:12 AM »
I'd love to know what's "behind the curtain" on credit scores too. Mine has steadily dropped by a few points over the past several months. During that time I have had no new inquries, carried no non-mortgage debt, paid all my bills, and made all my scheduled mortgage payments. In a sane system I'd think the score would be creeping up, not down.

Did you have non-mortgage debt before? When I got my first car loan (yeah, I know, face punch, but at least it's 0.9%), my score went up. Showing that you can be trusted to pay more than one thing makes sense to improve your score.

Well, yes -- which makes me think that at the higher score levels, credit utilization percentage must be unimportant.

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Re: Relatives who just don't get it
« Reply #939 on: February 04, 2016, 08:35:34 AM »
I'll give you employability, but not "anything else". Credit score is used as a factor for personal insurance, and it's only allowed to be there because it's be actuarialy vetted to be predictive of losses. People with lower credit scores have more losses, as a group.

That isn't to say that one person with a poor credit score is a worse driver than someone with a great credit score, just that it's predictive enough that (most) states will allow insurance companies to take it into account, the same as age, sex, and make of car. You don't know for sure that one particular 16 year old in a Camaro is going to be a less safe driver than one particular 40 year old in a minivan, but the data predict that, on the whole, the first group is riskier than the second.
I would love to see the internal actuarial research done by insurance companies. I suspect there are a lot of other non-PC models that make actuarial sense but aren't used because the backlash against them would be a phenomenal blow to the brands.

Here's an overview, with references to other sources: http://www.iii.org/issue-update/credit-scoring.

It certainly is a balance between finding predictive factors that are supported by data and having those factors be allowed by the state departments of insurance. Plus, with 50 states + DC, GU, PR, VI, you'll virtually always have one state objecting to something the insurance carrier wants to do.

Here's a good example: driving record (MVRs) being used for people who drive for their jobs.  Almost all states say that insurance carriers who sell commercial auto coverage are allowed to take the driving record of employee drivers into account when evaluating the risk. So if you're a delivery driver for a local florist and you get a DUI driving your personal car on the weekend, your employer's insurance company is allowed to say "Mr. der Krake is an unacceptable driver per our guidelines and we will not be able to continue on your insurance if he remains on driving duty." Then, the owner of the florist needs to decide whether to fire you, move you to non-driving duty (floral arranging? answering phones?), or try to find a different insurance company.

BUT, if you're in Washington State, your legislators decided that wasn't fair; just because you made the decision to drive drunk on the weekend doesn't mean that you're any more likely to drive your flower trunk drunk, and you shouldn't lose your job for something non-job-related. (Despite the fact that the insurance companies can back up with data the concept that people who drive their personal vehicles unsafely also drive commercial vehicles unsafely.) So, in WA, insurance companies can only assess the risk of drivers based on their "commercial MVR" and not their "personal MVR".

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Re: Relatives who just don't get it
« Reply #940 on: February 04, 2016, 09:01:14 AM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I know that my dad has a lot of open lines of credit just to keep his score up (Mortgage, mortgage (second house), auto, auto, credit card, credit card, credit card)--all of them could be paid off now, but he likes his 800 something score. Knowing him though, I doubt that it is actually costing him anything--he probably carries such a low balance on all the credit cards that he doesn't really even get a hit.

The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.

I think the point of credit scores is not whether you can be trusted to pay banks back on time.  It's how much money they can earn off of you as a borrower.  So they want you to pay it back, but they also want you to be in debt to them so they get interest.  It's one of the reasons using score as a proxy for employ-ability or anything else is problematic.

This is not discernible]at all from a credit report or score. The data on your credit report shows whether you made at least the minimum payment on time each month. It does not say whether you are carrying a balance or paying your bill in full each month.

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Re: Relatives who just don't get it
« Reply #941 on: February 04, 2016, 09:51:45 AM »
The fact that credit scores are calculated using some sort of super-secret algorithm has turned everyone into a cargo cultist. It's insane.

I know that my dad has a lot of open lines of credit just to keep his score up (Mortgage, mortgage (second house), auto, auto, credit card, credit card, credit card)--all of them could be paid off now, but he likes his 800 something score. Knowing him though, I doubt that it is actually costing him anything--he probably carries such a low balance on all the credit cards that he doesn't really even get a hit.

The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.

I think the point of credit scores is not whether you can be trusted to pay banks back on time.  It's how much money they can earn off of you as a borrower.  So they want you to pay it back, but they also want you to be in debt to them so they get interest.  It's one of the reasons using score as a proxy for employ-ability or anything else is problematic.

This is not discernible]at all from a credit report or score. The data on your credit report shows whether you made at least the minimum payment on time each month. It does not say whether you are carrying a balance or paying your bill in full each month.
At least one of my credit card accounts show that - one line regarding one of my credit cards from my credit report says (balance / date paid / minimum payment / actual payment):

Dec 2015: $407 / December 4, 2015 / $20 / $3,062

This info is repeated for every month I've had the card.  I'd think you could look at that and say "it is unlikely dandarc is paying much in the way of interest on this card".  Also noticed that other credit cards seem to not have this detailed information, at least on the one report I looked at.  So it may depend on exactly which cards you use and what they report.
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Re: Relatives who just don't get it
« Reply #942 on: February 04, 2016, 10:31:48 AM »
It certainly is a balance between finding predictive factors that are supported by data and having those factors be allowed by the state departments of insurance. Plus, with 50 states + DC, GU, PR, VI, you'll virtually always have one state objecting to something the insurance carrier wants to do.
Right, there's definitely a social acceptance criteria. Right now, in the health market, we are cool with charging smokers and old people more, that's considered fair. Maybe in twenty years we'll be cool with charging more to anyone with a BMI > 30. Or lumping people into different risk pools by race. Or political leanings.

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Re: Relatives who just don't get it
« Reply #943 on: February 04, 2016, 10:46:12 AM »
Well, yes -- which makes me think that at the higher score levels, credit utilization percentage must be unimportant.
I have no mortgage, one credit card (paid off monthly), one personal loan ($65,000) and my credit score is over 800.  I, too, don't understand how it is calculated.

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Re: Relatives who just don't get it
« Reply #944 on: February 04, 2016, 10:48:14 AM »
The only other person I am acquainted with that I know has an 800 something score is leveraged up to his eyeballs on everything and probably is paycheck to paycheck. But he has never missed a payment; he can be trusted, while I, with my one credit card, cannot, even though I just paid cash for a nice car and have over $20k in liquid or near liquid funds.

Random datapoint: both my wife and I have credit scores right around 800 at age 26. Between the two of us we have 1 mortgage loan ($104k), 1 student loan ($65k), and 11 credit cards (all paid in full each month). We were mid 700's with the mortgage loan, student loan, and 3 credit cards mid last year. Adding 8 new credit cards somehow brought our score way up, even though the average age of credit is super low now.

This may be able to be explained by looking at your utilization. CC companies generally like to see a low utilization % of total credit, so if you've added 8 cards you've likely significantly increased the denominator of that calculation. My own experience adding 5 new CC's would corroborate this, as my score has increased (initially it fell a bit because of the age-of-credit thing, but it has bounced back).
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Re: Relatives who just don't get it
« Reply #945 on: February 04, 2016, 10:54:14 AM »
It certainly is a balance between finding predictive factors that are supported by data and having those factors be allowed by the state departments of insurance. Plus, with 50 states + DC, GU, PR, VI, you'll virtually always have one state objecting to something the insurance carrier wants to do.
Right, there's definitely a social acceptance criteria. Right now, in the health market, we are cool with charging smokers and old people more, that's considered fair. Maybe in twenty years we'll be cool with charging more to anyone with a BMI > 30. Or lumping people into different risk pools by race. Or political leanings.

Is it illegal for a health insurer to use publicly available info to determine rates, am thinking that BMI, fitness levels and even political leanings would not be that hard to extract from FB for a great many people?  Maybe they could get BMI more directly but still.   Also could they use FB to look at your friends/family and there level of health, I assume there is some correlation within social circles.  Do the laws relate to the method of collection of information or its usage?
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Re: Relatives who just don't get it
« Reply #946 on: February 04, 2016, 11:05:10 AM »
It certainly is a balance between finding predictive factors that are supported by data and having those factors be allowed by the state departments of insurance. Plus, with 50 states + DC, GU, PR, VI, you'll virtually always have one state objecting to something the insurance carrier wants to do.
Right, there's definitely a social acceptance criteria. Right now, in the health market, we are cool with charging smokers and old people more, that's considered fair. Maybe in twenty years we'll be cool with charging more to anyone with a BMI > 30. Or lumping people into different risk pools by race. Or political leanings.

Is it illegal for a health insurer to use publicly available info to determine rates, am thinking that BMI, fitness levels and even political leanings would not be that hard to extract from FB for a great many people?  Maybe they could get BMI more directly but still.   Also could they use FB to look at your friends/family and there level of health, I assume there is some correlation within social circles.  Do the laws relate to the method of collection of information or its usage?

(I know this isn't a serious conversation about BMI, and no one was saying that it is a good indicator of health)

BMI would never happen. It is a pretty horrible indicator of health if you're going to use it as a major indicator. For example, by BMI my brother comes up Obese whereas I am merely overweight. In reality, my brother is ripped and can swim a mile without hesitation and other than asthma has no real health issues, whereas I really should lose 20 pounds of fat and add muscle, have about half the endurance that I did 6 years ago, and have high bloodpressure (although based on my family, that is going to be high no matter what). But looking at BMI, folks would say I'm in better health.

Now back to your regularly scheduled programming

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Re: Relatives who just don't get it
« Reply #947 on: February 04, 2016, 11:49:45 AM »
My sister-in-law (going to be 22 soon) has been driving a used car with probably ~160,000 miles on it for the last two or three years.  My MIL bought it for her for $5,000 or so, and it has had a ridiculous number of problems since she got it, including dying at a stoplight last year and again on a test drive with a shop while she was trying to get a "weird noise" fixed.  SIL has taken pretty good care of the car overall, it was probably a little lemony to begin with.

The solution to this issue, obviously, was to buy a $22,000 used Crosstrek. 

SIL is a full-time student and works ~15 hrs a week, giving her ~$300/mo in disposable income (not including whatever she's living off of from her loans).  I'm not exactly sure how she plans on making her payments AND buying food.  MIL says it will be a "life lesson" having a car loan to pay every month.

On the super-bright side, DH was completely shocked by the purchase and really tried to talk them into looking at nice used cars at dealerships or on Craigslist, and said it should be a "life lesson" that you get to drive a used car until you have, say, a real income or a full-time job.  Personally I'm good with used cars forever, but we're working on it :) 

mtn

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Re: Relatives who just don't get it
« Reply #948 on: February 04, 2016, 12:32:54 PM »
My sister-in-law (going to be 22 soon) has been driving a used car with probably ~160,000 miles on it for the last two or three years.  My MIL bought it for her for $5,000 or so, and it has had a ridiculous number of problems since she got it, including dying at a stoplight last year and again on a test drive with a shop while she was trying to get a "weird noise" fixed.  SIL has taken pretty good care of the car overall, it was probably a little lemony to begin with.

The solution to this issue, obviously, was to buy a $22,000 used Crosstrek. 

SIL is a full-time student and works ~15 hrs a week, giving her ~$300/mo in disposable income (not including whatever she's living off of from her loans).  I'm not exactly sure how she plans on making her payments AND buying food.  MIL says it will be a "life lesson" having a car loan to pay every month.

On the super-bright side, DH was completely shocked by the purchase and really tried to talk them into looking at nice used cars at dealerships or on Craigslist, and said it should be a "life lesson" that you get to drive a used car until you have, say, a real income or a full-time job.  Personally I'm good with used cars forever, but we're working on it :)

I understand it. Sometimes, you're just done with dealing with a car that doesn't work, and  by-gawd I'm willing to pay for one that I know will be reliable because it is new!

Depending on the loan amount, it may not be the most horrible thing in the world assuming she plans to keep it for 10 years or so. (And you highlighted it, she'll pay for food using the student loans)

Huh, that is funny coming from me. I just spent what I thought was an exorbitant amount of money on a 2006 Honda with 100k miles. But we'll have that for 3-5 years and we don't forsee losing a lot of money on it since (ignoring TTL) we paid about wholesale.

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Re: Relatives who just don't get it
« Reply #949 on: February 04, 2016, 12:44:48 PM »
It certainly is a balance between finding predictive factors that are supported by data and having those factors be allowed by the state departments of insurance. Plus, with 50 states + DC, GU, PR, VI, you'll virtually always have one state objecting to something the insurance carrier wants to do.
Right, there's definitely a social acceptance criteria. Right now, in the health market, we are cool with charging smokers and old people more, that's considered fair. Maybe in twenty years we'll be cool with charging more to anyone with a BMI > 30. Or lumping people into different risk pools by race. Or political leanings.

Is it illegal for a health insurer to use publicly available info to determine rates, am thinking that BMI, fitness levels and even political leanings would not be that hard to extract from FB for a great many people?  Maybe they could get BMI more directly but still.   Also could they use FB to look at your friends/family and there level of health, I assume there is some correlation within social circles.  Do the laws relate to the method of collection of information or its usage?

(I know this isn't a serious conversation about BMI, and no one was saying that it is a good indicator of health)

BMI would never happen. It is a pretty horrible indicator of health if you're going to use it as a major indicator. For example, by BMI my brother comes up Obese whereas I am merely overweight. In reality, my brother is ripped and can swim a mile without hesitation and other than asthma has no real health issues, whereas I really should lose 20 pounds of fat and add muscle, have about half the endurance that I did 6 years ago, and have high bloodpressure (although based on my family, that is going to be high no matter what). But looking at BMI, folks would say I'm in better health.

Now back to your regularly scheduled programming
So they've changed the insurance at my old company, which used to self-insure.  I still have friends there, and one of my current coworker's spouses is there.

So, for their insurance, they have two different premium tiers.  There's a "test" now -
1.  BMI
2.  Smoker/ non=smoker
3.  Blood pressure
4.  Blood sugar
5.  ??  I don't remember the fifth one

If you OR your spouse fail 3 out of the 5, then you get the higher premiums.  I know this because my friend, whose husband works there, barely passed.  They don't smoke, but they are both overweight.  She passed, but he has both high BMI and high blood pressure.