Question by Joe in texas: Are we foolish to trust the credit reporting agencies?
Since they do not use debt/equity ratios or income amounts to calculate credit risk.
The credit rating agencies gave a high rating to institutions with bad loans given to unworthy borrowers in the sub-prime mortgage mess. Are the consumer credit rating agencies creating a bigger disaster with their voodoo credit rating system?

Credit rating agencies are now under scrutiny for giving investment-grade ratings to securitization transactions (CDOs and MBSs) based on subprime mortgage loans.

Is concumer credit the next crisis?

Best answer:

Answer by heybulldog
Trust isn’t the right word.

The sub-prime mess came about from fico score lending. They lent people money based on a stupid score and not looking at the person behind the number.

Building credit is the biggest joke of the 21st century.
It will bring nothing but debt.

We have enough Government in our lives.
The Government is not gonna fix you. You are.

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