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The Origin of Credit...

By
Mortgage and Lending with Diverse Solutions

Did you know that Arthur Morris is the man responsible for creating the installment loan in (or around) 1910?

It was called the Morris Plan (clever name huh) and it was the first stab at making credit available to the average person despite heavy criticism that lending money to working class citizens had failure written all over it.

And yet the American economy today is built on credit!

Back then, the lending requirements were as follows:

  • Two co-signers in order to qualify
  • Loan term = 1 year
  • Payments were made in weekly and monthly installments
Boy how the rules have changed since then.
Show All Comments Sort:
Sean Allen
International Financing Solutions - Fort Myers, FL
International Financing Solutions

hhhhmm, Interesting. Thanks for the history lesson.

Sean Allen

May 16, 2008 01:09 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

Sean: I purposely kept it short and sweet in light of the weekend :D

May 16, 2008 01:11 PM
Find a Notary Public needAnotary
QEC Internet Services - Long Beach, CA

Interesting!  Very innocent and modest beginnings.  My how things have changed in 98 years.

May 16, 2008 01:16 PM
Stacey Brown
ILM Realty - Colchester, CT
REALTOR

Back in htose days, a house would cost you less than a year's salary. Now it's more like 3 years salary.

May 16, 2008 01:55 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

ILM Realty: can you belive my mother bought her first two houses at age 19 for $28,000 and $32,000 a piece!?

May 16, 2008 01:59 PM
Cheryl Johnson
Highland Park, CA

Ricardo ... You're hooked on Google books, too, eh?  :-)

Thanks, A Financial History of the United States  looks like a great find !!!!! ....

May 16, 2008 02:02 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

Cheryl: Hiya! I caught this little bit of history in the Wall Street Journal and it prompted me to look for a source...Google brought me "A Financial History of the United States" and I found it completely and utterly interesting. I mean just imagine how far we have come! It's really quite amazing when you pause to think about it.

Great books are definitely an addiction of mine and this one qualifies to be on the bookshelf.

May 16, 2008 02:06 PM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Ricardo, I had no idea, amazing thanks for sharing that tidbit.

May 16, 2008 02:20 PM
Cheryl Johnson
Highland Park, CA

Ricardo -- Excuse the out-bound link, but for anyone who hasn't yet discovered the joy of Google Books, here you go ...

http://books.google.com/advanced_book_search

May 16, 2008 02:34 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

Cheryl: by all means...it will save us the expense of a day at Barnes & Noble :D

Missy: It's amazing when you think about it. Almost everything we consume is on credit.

May 16, 2008 02:37 PM