Future of Credit

[piercehawkeye45]

First off, I would like to state that I know very little about this subject so just let me know if this question is not valid or at least some underlying assumptions leading to my question are not valid. My knowledge of credit is that banks will loan out money to people in the forms of credit cards, loans, or whatever, and the banks make money off interest rates from preset loan conditions or penalty rates from missed payments. I personally have never been charged with a missed payment and I will continue to do this but I luckily have not have to taken out a loan at this point.


So, yesterday I was talking to someone in his early 30s who has a secure job and family and he mentioned how he almost bought a bunch of houses in his neighborhood for cheap and then would make the money back in the form of rent. His logic is that since many people of my age, late teens and early twenties, will have really bad credit scores, they will not be able to take out house loans and will be forced to rent, therefore renting from him.

We then discussed how people are getting more irresponsible with credit and how many people will not be able to take out house loans, car loans, etc.

So my questions are, first, if this is true or just an overblown speculation? Then, how would this effect our credit system if banks do not trust the majority of people to take out house loans, sacrificing potential profits? As I said, I don't know much about this besides being responsible with credit, but wouldn't a large distrust between banks and loaners cause HUGE problems with the house industry? And if this is true, is their any speculation on possible ways those industries will evolve because of this?