I was talking with a colleague yesterday and he shared that his credit is bad because of a bad partnership he had recently and that his partner did not pay his share of the loans. It ended up hitting his credit pretty badly. Anyway, he has a good paying job. But because of the defaults he has a very bad credit. I believe eventualy he will be able to fix it…
Then I started thinking about a thread we had here few weeks ago about credit score and the people who have them. At first I thought that my colleague would be a good risk and I would rent to him - his bad credit was a result of one bad decision to go in business with someone that did not pay his share of the bills. However as I was talking with him I realized that he might not be such a good risk - in the past he managed his financials responsibily because he had a good credit. He had a lot to lose if he was not financially responsible. Now that his credit is bad, he doesn’t have much to loose. So he may not care as much in maintaining it. One more late payment will not really make much difference to him (besides delaying his recovery). It made me rethink the importance of credit reports in the decision to rent to someone.
I hope this makes sense. At least it does in my mind. I thought about sharing with the rest of the forum.
Have a wonderful day!