A couple days ago on our sister site WalletPop, forensic accountant Tracy Coenen asked readers for tips on how to help her lower her credit score. Her reasoning? Part of the White House's bailout plan involves freezing the interest rate on adjustable rate mortgages for five years, but only for borrowers who meet certain criteria. One of those criteria is having a FICO score below 660.
Apparently other people are thinking like Tracy. According to MarketWatch:
Should we fault people for trying to game the system? Heck no! That's what systems are for. If multi-billion dollar companies can work out ways to avoid paying any taxes at all, why shouldn't you lower your credit score to save some money on your mortgage?
The fact that the bailout appears so easy to manipulate is really indicative of how stupid it is. Does it make sense to offer a low interest rate only to people with a poor record of paying back loans? Isn't that the exact opposite of the entire point of credit ratings?
Zac Bissonnette is an associate editor with WalletPop, AOL Money & Finance's new personal finance blogsite that covers the financial issues that are important to you in a fun, interesting way.
Apparently other people are thinking like Tracy. According to MarketWatch:
Because income isn't checked, some experts worry that borrowers who might otherwise be able to afford higher payments will try to lower their FICO score to qualify for a rate freeze... "The message here is to get your FICO score down," Mark Adelson, a structured finance expert, said. "Don't pay some bills, but keep up with mortgage payments."
Should we fault people for trying to game the system? Heck no! That's what systems are for. If multi-billion dollar companies can work out ways to avoid paying any taxes at all, why shouldn't you lower your credit score to save some money on your mortgage?
The fact that the bailout appears so easy to manipulate is really indicative of how stupid it is. Does it make sense to offer a low interest rate only to people with a poor record of paying back loans? Isn't that the exact opposite of the entire point of credit ratings?
Zac Bissonnette is an associate editor with WalletPop, AOL Money & Finance's new personal finance blogsite that covers the financial issues that are important to you in a fun, interesting way.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
