Why do you buy the Snake Oil?

[jackfaire]

So no matter what the issue is everything from someone running for office, the quality of the tools I want to buy, customer service comments etc. I always look at all sides of it and ask myself the Batman question "Who Benefits"

Introduced in the storyline Identity Crisis it was a question Batman said he always asks himself when solving a case Who Benefits.

I have taken to applying this question to everything in my life. When there was a measure to forbid Auto Insurers from using a person's credit report to determine their insurance rate. The Auto Insurers sited a study "proving" that poor people with bad credit get into more accidents.

That was misleading at best what the study actually said was that poor people with bad credit and little pocket money are more likely to use the auto insurance they are forced to pay for while people with good credit will do as much as they can to pay out of pocket because it's often cheaper than their rates going up for a service they are forced to have the does everything it can to never be used. (Except for investing in better less accident prone vehicles of course)

So I look at everything and asked the question Who Benefits. If we pass the measure it doesn't generate profit for the people trying to put it in effect at all.

But if it doesn't pass then the Auto Insurers benefit by being able to continue gouging poor people.

But people bought the Snake Oil.

I just don't get why. I see this time and time again. 100 people can tell them "This is how it is" and they will say "well you say that but you probably benefit from this somehow and you're just covering up the TRUTH the underdog is trying to bring us. Meanwhile the "Underdog" who is a major corporation that profits the more people believe their BS gets more people believing their stuff even if NO ONE is hiding who's paying who and it's all out in the open who's profiting.

I will admit this genuinely confuses me. I even understand that sometimes you don't want to believe something that scares you upsets you etc. But even in situations where the person says things like "Well yeah it would be nice to pass that law but I don't think it's actually necessary so I am voting against it"

Color me gobsmacked.

[mjr]

The problem with a credit score, in general, is that it doesn't take into account one's income.

You can make a good living, be up to your eyeballs in debt, and have a sub-par credit score.

There are people who make VERY good money who generally don't use credit at all. In these cases, they have a low (or no) credit score, and therefore when it comes to their insurance, they pay higher premiums.

I make decent money, and I'm against using credit checks for insurance. Some places are even trying to do credit checks as a condition of employment. The argument is if you have poor credit (note wording) that you're more likely to steal.

[Greenday]

The problem with a credit score, in general, is that it doesn't take into account one's income.

You can make a good living, be up to your eyeballs in debt, and have a sub-par credit score.

There are people who make VERY good money who generally don't use credit at all. In these cases, they have a low (or no) credit score, and therefore when it comes to their insurance, they pay higher premiums.

I make decent money, and I'm against using credit checks for insurance. Some places are even trying to do credit checks as a condition of employment. The argument is if you have poor credit (note wording) that you're more likely to steal.

How much you make shouldn't be relevant to a credit score. The whole point of a credit score is to show whether or not someone has a history of completing promised payments or not.

As for insurance, that makes less sense. Your ability to pay debt doesn't determine frequency or expenses for your need for insurance services.

As for jobs, it depends on the job. Working for the government, credit checks are a large part of clearances. If someone is constantly in debt, constantly living beyond their means, they are more likely to be bought off by foreign enemies. For someone who is living comfortably, being offered $10k would be tempting but for someone who is drowning in debt because of an embarrassing amount of spending? That's a life-line. I could just as easily seeing this being applied to any company concerned about employees stealing secrets and giving them away for cash.

[TheHuckster]

As for jobs, it depends on the job. Working for the government, credit checks are a large part of clearances. If someone is constantly in debt, constantly living beyond their means, they are more likely to be bought off by foreign enemies. For someone who is living comfortably, being offered $10k would be tempting but for someone who is drowning in debt because of an embarrassing amount of spending? That's a life-line. I could just as easily seeing this being applied to any company concerned about employees stealing secrets and giving them away for cash.

I find that to be a bit dubious of an assumption, though. Poor credit can indicate poor financial management, but can also often indicate just tough luck. For a lot of people, all it takes is a single event to let the house of cards come crashing down, whether it be a serious injury, loss of a job, or a divorce. Suddenly they are in debt, and it can be very difficult to get out of. Denying a job due to such circumstances only worsens the problem for them.

As for whether the state of being in debt indicates a motivation to "sell-out" or embezzle money is also a bit dubious, IMO. I've observed scandals ranging from petty theft to egregious "steal the money and flee the country" in my life, and while some of the perpetrators were trying to feed an expensive gambling or drug addiction, or trying to get out of debt, a lot of the time it was simply a combination of simple greed and opportunity, and it's really more their lack of moral character that lead to that decision than any need.

[mjr]

How much you make shouldn't be relevant to a credit score. The whole point of a credit score is to show whether or not someone has a history of completing promised payments or not.

With regard to your second sentence: not necessarily. While true, it is also a measure of how much debt you currently have, and the length of said debt/credit history. It is, to a point, a "debt score". Because you have to essentially maintain a certain level of debt, open accounts, etc. to get a certain score.

As for insurance, that makes less sense. Your ability to pay debt doesn't determine frequency or expenses for your need for insurance services.

Agreed. But apparently research has been done on this and some insurance companies actually do try this. Or at least they did.

As for jobs, it depends on the job. Working for the government, credit checks are a large part of clearances. If someone is constantly in debt, constantly living beyond their means, they are more likely to be bought off by foreign enemies. For someone who is living comfortably, being offered $10k would be tempting but for someone who is drowning in debt because of an embarrassing amount of spending? That's a life-line. I could just as easily seeing this being applied to any company concerned about employees stealing secrets and giving them away for cash.

While what you say is true, for a while this seemed to be spreading into non-government and non-financial sectors. Almost any company you work for, though, has some kind of "secret" (be it intellectual property, or whatever) that could be "sold" for the right price.

I don't think it's right, though, to use a credit score (or, more correctly, a credit report) to determine employment worthiness. What about people who don't use credit and either have a low or no credit score and/or credit history? I mean, personally for me, the only real debt I have (revolving) is my mortgage. I still have a tube TV I bought 15 years ago, and a laptop a friend gave me, mostly because I refuse to finance them, and don't quite have the cash to buy the ones I want outright. I have a car that's paid for and almost 12 years old. Mostly because it still runs well and I don't want another $400+ per month car payment. Both of which affect my credit score.

Most people, it seems, get a credit card at 18-ish...but do they need it? And does it really do them good to do so? We've been conditioned that it's super important to "establish credit history". But is it?

[TheHuckster]

I don't think it's right, though, to use a credit score to determine employment worthiness. What about people who don't use credit and either have a low or no credit score? I mean, personally for me, the only real debt I have (revolving) is my mortgage. I still have a tube TV I bought 15 years ago, and a laptop a friend gave me, mostly because I refuse to finance them, and don't quite have the cash to buy the ones I want outright. I have a car that's paid for and almost 12 years old. Mostly because it still runs well and I don't want another $400+ per month car payment. Both of which affect my credit score.

A common misconception seems to be that a credit check tends to boil down to a score and nothing else. When you run a credit check on someone, you get a ton more than that, including which loans they have, all of the payments they've made over the years, including any that were flagged late, and any public records (bankruptcy, leins, etc.). The score at the end is just a tl;dr version.

Having a car loan on your report shouldn't be detrimental as long as you're making your payments and it isn't a burden on your finances given your income. Same goes for a mortgage. If you have lines of credit like that and they aren't a financial burden and you're good on your payments, your score, all other things being equal, should still be 700+, which should never deny you a job except in some very odd situations.

Credit cards are where things can get hairy, since having a high balance could raise some red flags, and having many cards, all of which have high balances, could be very detrimental. Again, though, one shouldn't judge another's credit card balance on its face, since it could all be due to falling into rough times, which everyone goes through in life, and shouldn't be this automatic indicator that one is irresponsible.

If you're in a worse situation where you have defaulted on a loan, have maxed out your cards, or had to declare bankruptcy, that's where you run into those low scores.

[mjr]

A common misconception seems to be that a credit check tends to boil down to a score and nothing else.

True. And I did make sure I edited part of the above to reflect credit report, not just credit score.

If you're in a worse situation where you have defaulted on a loan, have maxed out your cards, or had to declare bankruptcy, that's where you run into those low scores.

This is true, but it still should not, in my opinion, keep someone from getting a job. I think in most cases that neither a credit report nor credit score should be used to determine employment.

[HYHYBT]

It's not about identifying individuals definitely, but about probability and the notion that quick, simple, and objectively measurable filters, no matter how mediocre, are better than the time-intensive, complex, subjective process of treating all applicants as whole persons rather than as numbers and checkboxes. You only get to do the latter after narrowing the field considerably, no matter how artificial and, up to a point, irrelevant, the means used.

I'm against a credit score (or report, but the distinction doesn't much matter) being used for *any purpose whatsoever* other than deciding whether or not to issue credit, but it's at least not as bad as demanding Facebook passwords. Which, apparently, is still legal for no good reason.

[jackfaire]

Uhm yeah that was just an example of people going against their own self interest because someone that's going to profit off of them told them so. The topic is why do people do that when they know it's the company profiting off of them that is telling them these "facts"

[mjr]

but it's at least not as bad as demanding Facebook passwords. Which, apparently, is still legal for no good reason.

I don't have a FaceBook account, so I don't know if a potential employer would believe me or not. There are a few other people out there with my name, so that could potentially cause a problem (i.e. the employer thinks I'm lying to them).

[mjr]

Uhm yeah that was just an example of people going against their own self interest because someone that's going to profit off of them told them so. The topic is why do people do that when they know it's the company profiting off of them that is telling them these "facts"

It's an unfortunate fact of life that it happens. Think about all the commercials you see now for drugs. "Go see your doctor to see if XYZ is right for you!"

The other problem is, most people, for whatever reason, don't ask "who does it benefit"? Why? Because in a way it benefits them, too. And most people are more interested (I think) in who can sing, or dance, or what the Kardashians are doing, rather than researching things like this.

This is why there are websites like snopes, truthorfiction, and TV shows like Mythbusters. And it's also why you get the same chain letter in your email over and over again from crazy aunt Ida.

And honestly, most people likely just don't care.