Overview
Do you know your credit score? Regardless, do you know how integrally important your credit score is when obtaining basically any type of consumer debt, both from the perspective of whether or not you are given credit as well as the corresponding interest rate? As a [very good] general rule, the higher your credit score, (A) the higher the probability of getting credit and (B) the lower the interest rate you will receive, relative to that type of debt/length of time.
For the initial post of the Discussion 2 Forum, you are to do the following:
List and explain the various factors that credit agencies utilize in determining your credit score. Indicate which factor are the most important. If you know your credit score and want to list it, feel free to do so (this last part is not required).
It is statistically proven that viewed from a collective lens, those who have lower credit scores are more likely to have difficulty paying back loans and/or default on that debt. Hence, to mitigate for that risk, lenders will almost invariably charge a higher interest rate to those with lower credit scores for the same type of debt (for example, if I get a 5-year car loan of $50,000 with excellent credit, my interest rate would be significantly lower than someone who wants the same 5-year, $50,000 loan if they have poor credit, and that is if they get credit at all). Some people think that this is unfair for those with lower credit scores. Others think that those with higher credit scores should benefit from their prudence, and that lenders are right to give higher interest rates to those with low credit scores, in order to mitigate risk. Indicate, explain, and rationalize your opinion on this (remember as well that people can take steps to improve their credit scores over the long-term).