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The careless errors of credit reporting agencies

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Re: The careless errors of credit reporting agencies

#121

Post by gaur »

ThomPete wrote: post #110
superuser2 wrote: post #101

Earlier quoted context omitted.

>you are trusted by definition I felt pretty "trusted by definition." Citi gave me a credit card with a $3,000 limit as a college freshmen. A few years later I had an $8,000 limit card and a $10,000 limit card. I bought my car certified-pre-owned under a program that writes favorable low-cost loans to recent college graduates with no or limited credit history (with an offer letter or paystubs). You just aren't truste…

You are american you have a history and your parents have a history. This is not something that you can have different opinions about it's how the US credit history system works by definition. Not saying one is better than the other, it's just how it works in the US.

Please punctuate.

Re: The careless errors of credit reporting agencies

#122

Post by dawnerd »

ThomPete wrote: post #108
rco8786 wrote: post #89

Earlier quoted context omitted.

I'm curious why you think that is absurdly backwards. Not necessarily disagreeing, but it's not hard to justify wanting to see a history of repayment vs trusting by default.

It's absurdly backwards because it's asking you to create debt which normally is the opposite of showing you are good with money and I would question the validity of seeing people paying back limited debt to be indicative of ex. borrowing for a house. You could instead just look at the history of their debit card usage to figure out whether they are trustworthy. As I said though I understand why they do it, it's just…

I think the way we do it in the states is reasonable enough. I wouldn't expect any person outside of those that are gambling to loan money without building up trust first. If you're making minimum wage and don't have a lot in assets you're not going to have a lot of available credit.

A lot of people don't realize this I think but if you hold a balance, especially over whatever percent of your total credit, it hurts. The moment I paid off all my cards my credit score jumped and all my limits increased.

Re: The careless errors of credit reporting agencies

#123

Post by sbov »

wyager wrote: post #70
themartorana wrote: post #40

Earlier quoted context omitted.

Same goes for every credit rating agency in the country (world?). Remember all those AAA rated swaps? It is disturbing how the entire economic system is set up to make life harder on those it's hardest on. Poor, in debt, barely making ends meet? You're lucky if you can get a credit card for under 30% APR. Mortgage rates historically low? Not for you. Need a loan? Sucks to be you. Finally clawed your way out of debt,…

> Poor, in debt, barely making ends meet? You're lucky if you can get a credit card for under 30% APR. What about that doesn't make sense? The person you described carries an incredibly high default risk. If credit scores are unfair to the poor, it's because they don't provide accessible way to fix errors. If your credit score is low because you're in excessive debt and unlikely to pay it off, then the credit scoring…

I don't think they're saying it doesn't make sense.

The point is, we help those that don't need help, and hurt those that are already hurting. We give better rates to people with high credit scores, but people with low ones probably need it more. It can turn into a feedback loop where the only way out is some form of outside help.

Re: The careless errors of credit reporting agencies

#124

Post by TeMPOraL »

SystemOut wrote: post #115
ThomPete wrote: post #110

Earlier quoted context omitted.

You are american you have a history and your parents have a history. This is not something that you can have different opinions about it's how the US credit history system works by definition. Not saying one is better than the other, it's just how it works in the US.

How do my parent's credit history have anything to do with my credit history in the US? Are you talking about co-signing for loans or possibly how a child can get a card under their parents' name? I didn't think either of those had any impact on the child's credit score.

Given what I hear about US banks, this seems like a most obvious variable to include in computing the credit score. Which leads me to my question - is there an official/exhaustive list of what exactly is considered and how, or is that a banking secret?

Re: The careless errors of credit reporting agencies

#125

Post by trolla »

DenisM wrote: post #105

I would think big data and machine learning could disrupt this industry completely, allowing much more accurate trustworthiness scores. Is anyone working on it? Seems like a lot of money just sitting on the table.

There already are some companies in that space that are using big data and machine learning for credit scoring. A few that come to mind: http://hellosoda.com/ http://bigdatascoring.com/

In case of Hello Soda they are using social media data for credit scoring.

PS I'm not associated with any of these companies.

Re: The careless errors of credit reporting agencies

#126

Post by dawnerd »

gcr wrote: post #81
ufmace wrote: post #74

Speaking of credit annoyances, I've seen a lot of "dark patterns" appearing on the credit agency websites for ordering your Federally-mandated free annual credit report. Their workflow for getting the credit report is structured to push you towards signing up for some kind of monthly subscription to some monitoring service, to the point where it's very difficult to find the buttons to just get the free credit report.…

From what I've seen, CreditKarma doesn't have many dark patterns like that. It doesn't have to be this way.

Credit sesame is also nice. Sure they upsell but how else are they going to cover costs?

Re: The careless errors of credit reporting agencies

#127

Post by dakial »

ThomPete wrote: post #83

The US is as far as I know the only country in the world who have a positive creditscore system. At least in Europe it's mostly based on a negative creditscore i.e. you are trusted by definition but if you don't pay your bills you end up not being allowed access to credit. In the US they don't trust you per definition and instead you have to prove that you are good with money by basically creating debt and then payin…

In Brazil one of the credit score agencies is trying to make people opt in into the positive credit score system. It is not working very well...

Re: The careless errors of credit reporting agencies

#128

Post by superuser2 »

SystemOut wrote: post #115
ThomPete wrote: post #110

Earlier quoted context omitted.

You are american you have a history and your parents have a history. This is not something that you can have different opinions about it's how the US credit history system works by definition. Not saying one is better than the other, it's just how it works in the US.

How do my parent's credit history have anything to do with my credit history in the US? Are you talking about co-signing for loans or possibly how a child can get a card under their parents' name? I didn't think either of those had any impact on the child's credit score.

Being an authorized user on a parent's credit card does build credit history for the child.

I did not have that, or any cosigned loan.

Re: The careless errors of credit reporting agencies

#129

Post by adrianmacneil »

ThomPete wrote: post #83

The US is as far as I know the only country in the world who have a positive creditscore system. At least in Europe it's mostly based on a negative creditscore i.e. you are trusted by definition but if you don't pay your bills you end up not being allowed access to credit. In the US they don't trust you per definition and instead you have to prove that you are good with money by basically creating debt and then payin…

NZ and Australia both have positive credit score systems (both introduced in the past 10 years).

I wouldn't necessarily agree with a gut reaction that positive credit scores are absurdly backwards. It makes sense that I would trust someone more as a borrower if I know they have repaid debts in the past (versus having no history at all). The system could probably use improvements and more regulation, but I don't think it's fundamentally off base.

Re: The careless errors of credit reporting agencies

#130

Post by jfoutz »

tn13 wrote: post #66
sschueller wrote: post #14

The whole credit reporting system is a money making racket and there is zero interest in keeping the information in it accurate. No one is held responsible for mistakes and the suffering people go thought because of it.

Most things in this world are about making money. Credit reporting system works pretty well and it is evident by the fact that we have seen mortgage bubble burst (where government forced banks to ignore credit ratings) and student loan bubble building up (ditto as housing loans). The marginal gain in making it more accurate is not very much so I am pretty sure banks will not put efforts in that direction. Also, banks…

I've read a fair amount about the 2007 bubble, but i don't recall anything about this,

> where government forced banks to ignore credit ratings

I was under the impression that subprime was keenly aware of credit ratings, subprime is defined as failure to meet the Fannie May and Freddie Mac standards. The CRA excluded race and gender as loan criteria, leaving credit rating as the goto.

There's lots about banks like countrywide ignoring credit rating, but i can't find anything where the government required ignoring the credit rating. Could you help me out with a link?

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