Cost more to be poor?

Question

I was somewhat well off until recently. By no means rich! I was able to pay my bills which is a nice comfort to have. I had great credit and got the best interest rates. Due to unforeseen circumstances, NOT within my control, I basically lost everything. My credit score now reflects my impoverishment. I am attempting to start over yet I am being crucified for my low credit. At this point I may never get back what I had. Each case needs to be reviewed with the individuals past credit history. You cannot control job lose, medical bills, poor economics conditions, etc. Having a low credit score can ruin your future and life for many years. That’s if you ever recover!

Answer 1

I completely disagree with the previous two answers. I think those who believe the contrary to "Cost more to be poor" is either being sheltered or not very observing.

The question isn't about how one gets from having a relative comfortable living to being poor, but simply life costs more money when it is the life of a poor person. I would further assert that life doesn't just cost more money but also cost more time for poor.

Here are a few example of why life is more expense for a poor person:
1. A poor person doesn't have a car and therefore has to rely on the corner food store for most of his/her food supplies. And guess what, the corner food stores charges $3 for a gallon of mile rather than the typical $1.90 at grocery stores.

2. A poor person can't obtain loan or mortgage to purchase a home and therefore is at the land lords mercy for an affordable place to live. And these places are generally not very well kept and maintained, damage to personal properties due to weather (for example) will put the poor person further back financially.

3. Financial institutions charge various service fees to bank with poor people that they don't with other customers. These fees either put poor person further behind average Joe financially or simply put some out of banking all together. The result is that the cost for paying bills (like utilities) is higher for poor people. Often they have to travel to an outlet by public transportation or pay by money orders both costs more than a stamp or direct debit.
Costing more money and time for poor to pay bills.

Once you are in such a situation, it will take a lot of efforts and controls to reverse.

Best wishes.

Answer 2

I disagree somewhat. Yes there are things that are out of your control. You can lose the job, get sick, have changing family situations, etc. But you can also structure financial planning to avoid any of these from becoming catastrophes. That's not to say that you didn't plan effectively since I truly don't know your specific situation. But I'm uncomfortable when people say that being rich or poor is out of your control. Circumstances may be out of your control, but being ready for them is not.

In response to JQT below: I don't disagree that some things cost more if you are poor. I will go one step further. I think our regressive tax system almost guarantees that. But, I think you are respnding to a different question than above. The author is saying that being poor ruined his credit and THAT has been more expensive. I think he should have titled his question"It costs more to have bad credit." Rich or poor, you can still have good or bad credit.

Answer 3

I WILL go one step further than Jay P. IF losing your job was a catastrophe, you DIDN'T plan properly. That makes you normal. most people in the US don't know HOW to plan properly.

NOTE: Your credit score DOES NOT reflect impoverishment. It reflects DEFAULTING on loans when you became impoverished. There ARE millionaires with lower FICO score that you and there are people with NO money that have higher FICO scores.