SchoolLenders MP Letter

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Dear _________________________________:

I am writing to you today to express my very deep concern about the state of lending in Canada. Since I know that legislative authority over banks lies with the federal parliament, I am hoping you will hear this message and take action.

Lending in Canada has become a huge problem with lenders offering ridiculous amounts of credit to people who cannot possible afford to repay those loans. And the use of the credit score to grant credit is, in large part, the cause of bad lending decisions.

I want you and your fellow members of parliament to create and support a bill that would ban the use of the credit score as a tool for granting credit.
If you do not already know, the credit score was never meant as a credit adjudication tool. The things you have to do to get a great credit score are completely counter to sound money management. The way to have a great credit score is to:

• have access to lots of different forms of credit leaving yourself over-exposed to identity theft and fraud
• have nice high credit limits so you don’t ever get above the 50% mark for credit utilization, providing tons of opportunity to dig a huge debt hole
• make only your minimum payment on your credit, so you pay interest.

Governments and other agencies can stop scratching their heads about what to do to help people understand how to create a stable financial picture and actually DO something. I want you to start work on abolishing the credit score as a credit granting tool. It was never meant to be, and it works against responsible financial behaviour.

You have the power to force lenders to do their jobs — assess each client’s ability to actually handle the credit they are being given — instead of relying on the credit score. How can putting sound lending back into practice be bad for business or for our country?

The credit score is also gaining momentum in arenas it has no business. According to a poll conducted by MRP Market Research Professionals in November 2010, 75% of insurance consumers are unaware that credit score is used to determine how much premium a person pays for home insurance. Did YOU know that? And employers are beginning to ask to check prospective employees’ credit scores before hiring. How would you fare if voters asked to see your credit score before voting for you?

Thank you in advance for your support. I know you will do the right thing and join with fellow members of parliament to create and support a bill that bans the use of the credit score as a tool for granting credit.

Please let me know that you have received this letter and are prepared to act on it so I can let my friends and family know that you not only appreciate my vote, you are responsive to my needs as a constituent.
Yours truly,

Your name
Your address

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