America has created a system that, once you fall from it, you are screwed. Forever. This system will cause you to lose – or never get – a car and a house, the 2 most vital things every adult American needs today to function in this society. You need a house to live in to take care of your basic human needs (food, water, warmth, shelter). You need a car to drive to the grocery story and buy food and to take you to your job where you earn money so you can afford a house and the basic human needs.
What is this system I speak of? Credit. You have to have credit to qualify to purchase a vehicle and a house. Without credit – or with bad credit – you will be denied those 2 things.
You just graduated high school and you move out of the house. You’re getting your first job, but to get that first job you have to have a car to drive you to that job. You go to buy a car but you are denied purchase because you have zero credit. You have zero credit because you just graduated high school. You have to have credit to get credit. So you can’t buy a car to get you to your job, and if you can’t get a job you can’t afford your apartment. If you can’t afford your apartment, you’ll be homeless without the basic human needs.
But there is a fix. You co-sign with someone. NOW Car Dealership will let you purchase that car and you live happily ever after with no more credit issues ever.
What a joke. Everyone has had credit score issues. You might relate to the below 2 scenarios:
Scenario #1 (This is a true story)
IT STARTS OUT GOOD: Sally married Joe. Sally made 30,000 a year and Joe made 90,000 a year. Together, they afforded a nice house, 3 vehicles, and a 4x4. They took vacations. They paid their taxes. They afforded clothing and food with ease.
UNEXPECTED, UNPREVENTABLE TRAGEDY: Joe had a medical condition that forced him to take time off work to deal with it. He began to run out of sick time. The condition got worse enough he was authorized temporary disability to give him time to fix this medical condition and get back to work fixed up and ready to perform. Joe’s job didn’t want to pay him to be out on temporary disability, so they fired him. Joe got representation to fight this verdict, to no avail. Joe was out of a job.
WHAT FOLLOWS: Without Joe’s income, they were living on 30,000 a year. The bills they had piled on when Joe had work didn’t go away. They couldn’t afford to pay for one of their vehicles if they had any chance of eating. Sally called the loan company on this car, begged them to give them an extension which should give Joe enough time to find another job. Loan Company refused to provide a loan extension, saying they wouldn’t authorize it unless BOTH Joe and Sally had work, which didn’t make any sense to Sally because if they both had work, they wouldn’t need the extension. Loan Company repossessed the car. Joe and Sally’s credit tanked.
THE ENDLESS CYCLE OF “YOU’RE SCREWED”: With the loss of Joe’s job, they now couldn’t afford health insurance for Joe to fix his medical condition, and since he couldn’t get his medical condition fixed, Joe couldn’t find another job because his condition would keep him out of work enough times they would eventually fire him, as had happened already. This went on for 3 years until one day, Sally discovered they could qualify for a 20,000 cash loan which would raise their monthly house payment a mere $30. They were ecstatic. With this loan, they could completely pay off one vehicle, freeing up $680 every month. With this extra money, they could finally afford medical insurance for Joe so he could get his condition fixed and finally get a job.
Sally started the approval process, and was denied because – you guessed it – her and Joe’s credit score was too low. They found a co-signer but the company would not accept a co-signer. Without extra money every month, they couldn't afford Joe’s health insurance. Without health insurance, Joe couldn't get fixed. Since Joe couldn't get fixed, he couldn't get work and earn money to pay the bills and improve their credit. Sally and Joe will continue this endless cycle.
This endless cycle all started because Joe had a medical condition that got him fired from a job. Unexpected and unpreventable.
IT STARTS OUT GOOD: Bill is a soldier and returns from serving 1 year in Iraq. Bill gets a normal job. Bill affords a house and a car.
UNEXPECTED, UNPREVENTABLE TRAGEDY: Bill is fired from his job because the company is downsizing and new guys are the first to go.
WHAT FOLLOWS: Bill lives in an area where people don’t like to hire veterans. Bill can’t get another job because of this, and his car is repossessed. Because he no longer has a means to drive 15 miles into town where all the jobs are, he is unable to continue his search for work. Because he still doesn’t have work, they foreclose Bill’s house. Bill’s credit tanked.
THE ENDLESS CYCLE OF “YOU’RE SCREWED”: Joe is capable of walking 15 miles into town to look for work, but he can’t live that close to town because being homeless, the city has rules against “camping within city limits” which is an arrestable offense and Bill doesn’t want to go to jail. The closest he can get to town and camp is 3 miles. Joe looks for work, but he has no money for clothes, a shave, or hygiene items and people won’t hire him because he’s dirty and stinks. Joe tries buying another house so he’ll have a place to shower and wash his clothes, but they deny him the loan because – you guessed it – Bill’s credit was so terrible. (And people wonder why we have so many homeless veterans.)
This endless cycle all started because Bill was fired from a job because the company was downsizing and new guys were the first to go. Unexpected. Unpreventable.
FINAL THOUGHT: Our credit system keeps people homeless and jobless. Once you fall from that ladder, you are done. Both me and my husband are hard working, tax paying citizens and yet scenario #1 happened to us. We are stuck in this black hole because our credit is bad enough we can’t get a loan to pay off debt which would give us more money to pay off all our other debt and keep us from going homeless. We are not the only ones like this. This system is ruining poor Americans. God-forbid any tragedy with job-loss happens to you because if it does, our credit score system will put a boot on your chest and push you deeper under the dirt.
JM Robison is the author of The War Queen, published with Tirgearr Publishing.