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Thread: "62 percent chance of a default within the next five years" - Chicago Tribune

  1. #61
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    The accessory financing is a no brainer. All Profit. AT&T also does it. They model customer behavior. The Phone companies use credit scoring models from the same people offering FICO. They can predict default risk quite well based on payments and banking background. If they have a checking account with $300 in it, the default risk drops as does the risk if they pay an electric bill. All this info is out there and the phone companies use it. It's a complete invasion of privacy but Americans have signed off on it. Phones have shown to be one of the first bills lower income people pay. Often before rent. Tmus stated that they increased credit requirements before tax season this year and intend to keep them all year round. Tax season releases so much cash to the lower income people (as much as 30% of what they make all year in one check) that they get into promises they can't keep. Sprint is giving away S7 to Boost customers without a credit check or payment history. Just pay activation fee. I donate time to a few charities and I was shocked, Shocked.

    The phone equality program has a default rate similar to prime. Subprime people can't pay anything on-time. Not 3 months let alone 12. By showing you can pay 12 months, it proves you are going to become prime. You are not offering credit to sub-prime as much as credit that indicates they are about to become prime.

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    Quote Originally Posted by idavenport90 View Post
    They have to pay the pre paid bill by the date it is due for 12 months same principal as post paid service you have a due date. Once they have proven that they can pay what they owe for 12 months they are considered well qualified since they made all the payments on time. No different then getting a secured card to build or repair bad credit you have to demonstrate that you are financial responsible and deserve a line of credit.
    Yes it is, for one, even after you meet the requirements of the secured card and the bank offers you an unsecured card it's not at their highest credit limit, it's an unsecured card with a very small spending limit huge difference. Banks are not dumb and are not going to offer somebody unsecured well qualified credit limits after making a minimal payment on a prepaid credit card for 12 months. That would be ridiculous wouldn't it? 2, paying 35 dollars a month for prepaid service doesn't prove anything.

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    Quote Originally Posted by gregorio102 View Post
    Yes it is, for one, even after you meet the requirements of the secured card and the bank offers you an unsecured card it's not at their highest credit limit, it's an unsecured card with a very small spending limit huge difference. Banks are not dumb and are not going to offer somebody unsecured well qualified credit limits after making a minimal payment on a prepaid credit card for 12 months. That would be ridiculous wouldn't it? 2, paying 35 dollars a month for prepaid service doesn't prove anything.
    They start you out with $500.00 credit limit if you pay your bill on time for 6 to 12 months they will general will increase it to $1,000.00. But you have to prove your credit worthiness no different than what T Mobile is doing.

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    Quote Originally Posted by MoreSpeed View Post
    The accessory financing is a no brainer. All Profit. AT&T also does it. They model customer behavior. The Phone companies use credit scoring models from the same people offering FICO. They can predict default risk quite well based on payments and banking background. If they have a checking account with $300 in it, the default risk drops as does the risk if they pay an electric bill. All this info is out there and the phone companies use it. It's a complete invasion of privacy but Americans have signed off on it. Phones have shown to be one of the first bills lower income people pay. Often before rent. Tmus stated that they increased credit requirements before tax season this year and intend to keep them all year round. Tax season releases so much cash to the lower income people (as much as 30% of what they make all year in one check) that they get into promises they can't keep. Sprint is giving away S7 to Boost customers without a credit check or payment history. Just pay activation fee. I donate time to a few charities and I was shocked, Shocked.

    The phone equality program has a default rate similar to prime. Subprime people can't pay anything on-time. Not 3 months let alone 12. By showing you can pay 12 months, it proves you are going to become prime. You are not offering credit to sub-prime as much as credit that indicates they are about to become prime.
    I'm not saying sprint is right to offer the same things on boost. But is it really a platform to follow for future financial stability? Probably not. On one hand you said that lower income people pay their cell bill before rent, on the other hand you say if you pay 12 months of prepaid it shows you are becoming prime. Not true. Once that bill becomes to high the cell phone bill will be the first to go. Again what is the worst that happens for the customer? They go back to prepaid.

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    Quote Originally Posted by idavenport90 View Post
    They start you out with $500.00 credit limit if you pay your bill on time for 6 to 12 months they will general will increase it to $1,000.00. But you have to prove your credit worthiness no different than what T Mobile is doing.
    Yes, it is...

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    Quote Originally Posted by gregorio102 View Post
    I'm not saying sprint is right to offer the same things on boost. But is it really a platform to follow for future financial stability? Probably not.
    No credit check or payment history required on the Sprint side it appears. Just to bump the quarter I suppose.

    The metrics TMUS use show the results as very close to prime credit. Prime credit people are the only people paying their bills on-time. Subprime can't for multiple reasons. One being time management and personal responsibility. If they pay 12mo, they pay as if prime.

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    Quote Originally Posted by MoreSpeed View Post
    No credit check on the Sprint side it appears. Just to bump the quarter I suppose.

    The metrics TMUS use show the results as very close to prime credit. Prime credit people are the only people paying their bills on-time. Subprime can't for multiple reasons. One being time management and personal responsibility. If they pay 12mo, they pay as if prime.
    Well of course what tmobile says it Is close. They couldn't justify it by saying "oh it could be dangerous". But the truth is nobody really knows how it will pan out. It is a customer grab. Grab whoever you can now and worry about it later. This has failed in most other businesses.


    If you were a homeowner, and had a tenant who had terrible credit and couldn't get financed to buy your house, but he rented it from you for a year, would you offer him zero down financing to buy it because he made 12 on time payments? Probably not. It's not a smart business move. Odds are more in favor of you being burned.

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    Quote Originally Posted by gregorio102 View Post
    Well of course what tmobile says it Is close. They couldn't justify it by saying "oh it could be dangerous". But the truth is nobody really knows how it will pan out. It is a customer grab. Grab whoever you can now and worry about it later. This has failed in most other businesses.
    You can call it a customer grab all you want. T Mobile is happy to take all the customers Sprint does not want.

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    Quote Originally Posted by idavenport90 View Post
    You can call it a customer grab all you want. T Mobile is happy to take all the customers Sprint does not want.
    When those customers default I'm not sure they will be so happy.

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    Quote Originally Posted by gregorio102 View Post
    When those customers default I'm not sure they will be so happy.
    T Mobile has protections in place to limit those kinds of loses. T Mobile gives bad credit customers a chance to prove credit worthiness.

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    Quote Originally Posted by idavenport90 View Post
    T Mobile has protections in place to limit those kinds of loses. T Mobile gives bad credit customers a chance to prove credit worthiness.
    Oh yea? What are those protections?

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    Quote Originally Posted by gregorio102 View Post
    Oh yea? What are those protections?
    Deposits, High EIP down payment or NO EIP depending on credit class. Those limit loses, so if bad credit customers want financing they have to prove they are financially responsible.

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    Quote Originally Posted by idavenport90 View Post
    Deposits, High EIP down payment or NO EIP depending on credit class. Those limit loses, so if bad credit customers want financing they have to prove they are financially responsible.
    No, we just went over that, paying a prepaid bill for 12 months doesn't prove you are financially responsible at all. Remember? People pay their prepaid bills sometimes before rent. Paying a prepaid bill proves nothing that's why nothing prepaid is considered actual credit. It's worthless. So what are the protections in place?

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    Quote Originally Posted by gregorio102 View Post
    No, we just went over that, paying a prepaid bill for 12 months doesn't prove you are financially responsible at all. Remember? People pay their prepaid bills sometimes before rent. Paying a prepaid bill proves nothing that's why nothing prepaid is considered actual credit. It's worthless. So what are the protections in place?
    I disagree. Pre Paid service has a due date. If you do not pay by due date your service is shut off. Post Paid has a due date no different than pre paid due date. T Mobile is allowing bad credit customer demonstrate their worthiness to get financing by demonstrating a history of pay their bill on time but those limits can be reapplied if they are late paying their bills.

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    Quote Originally Posted by idavenport90 View Post
    I disagree. Pre Paid service has a due date. If you do not pay by due date your service is shut off. Post Paid has a due date no different than pre paid due date. T Mobile is allowing bad credit customer demonstrate their worthiness to get financing by demonstrating a history of pay their bill on time.
    It doesn't display anything. By that thinking people who pay their rent a center payments on that big screen TV on time have the greatest credit worthiness of anyone. Doesn't work that way. Business that operate that way usually fail.

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