History Of The Credit Bureau

Our country is in turmoil and the source of it all comes from some of the good graces of man. Credit is very deeply engrained into our country’s history and it stems from the fact that certain products are too expensive for the average consumer; and also when immediate payment is inconvenient. This is how the consumer credit program was born.

If we take for example a typical California House priced at $395,000, in order to make a profit, the builder will need to sell several homes at the same price. The fact is that very few of us have $395,000 to put down in one go.

If the builder could only sell homes to people who were able to pay the lump sum, they would not sell so many homes and the price would also go right up to $3,395,000 due to the builder’s need to earn a profit which is equitable. However, the builder would difficultly make a profit if the homes were sold at $4000 or even $40,000.

The homes must be sold according to the perceived value and quality, whilst making it available for the average customer. This is the reason why the mortgage business is so big.

Another common example is going to a store and finding you don’t have enough money to pay for your purchases. The option in this case is to ask the store assistant to put it on your account.

Actually, this type of system can still be found where the merchant will allow the consumer a period of up to 30 days to repay the debt; when immediate payment for the products or services is inconvenient.

This trend began a while ago in the days of the general store where a patron would stop by the shop, choose a few products and have them charged to his personal account that he would pay at the end of each month.

You can still find this type of option but it has largely been exchanged with the modern day credit and department store cards. This system here is that you don’t have to pay off the balance in full. You can pay for some and spend it to the limit.

Unfortunately, this system quite often leads to trouble; ranging from late payments, to piling up debt and added stress. Advancement occurred with the birth of the credit bureau.

Merchants and creditors alike were apprehensive about doing business with bad debtors; so they needed a method to report problem consumers and a way to get some information about them before they could establish an account for them.

With the birth of the credit bureau they began finding information on individuals and businesses, and selling that information to subscribers (creditors) as well as receiving information.

Article Source: http://www.debtfinancearticles.com.

About the Author:
Elliott Dawson is a contributing real estate editor at http://www.debtfinancearticles.com/. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.