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The careless errors of credit reporting agencies

washingtonpost.com

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Re: The careless errors of credit reporting agencies

#171

Post by wongarsu »

toast0 wrote: post #52
wongarsu wrote: post #20

Earlier quoted context omitted.

I don't think the fact that the process is automated is a problem (and I don't see anyone saying so). The problem is that existing algorithms are bad (like in the article where an algorithm decided two people are the same based on name and year of birth alone, when all other factors speak against it) and that complaints are not handled properly,

[from the article] > the defendant, unsurprisingly, had the same legal first name, last name and middle initial. We were also both born in 1987. But our similarities end there: He has half a dozen convictions. He’s black. He’s currently incarcerated. And an arrest warrant indicated that he was homeless > when all other factors speak against it Given that the agency thinks they're the same person, the number of convic…

>I'm not sure that a credit agency would know if someone was incarcerated

I would assume they can get this information, considering that some reporter seemed to be able to get this information easily.

Making hard decisions on wether two people are the same is hard. But that's exactly why "name and year of birth match" seems like a naive algorithm. I would expect a match probability based on the treasure trove of statistical data that these agencies possess. A person that is currently incarcerated is less likely to be the same person that is currently spending and earning money, and for which landlords request reports. Skin color is strongly correlated to place of residence: if you know (automatically or manually detected from a mugshot) that one person is black, you can get the statistical probablility that the other person is black from the neighbourhood he lives in. etc.

>I think the root of the problem is getting a criminal background check and a credit report from the same place.

I agree that this is also not optimal. In Europe this type of information is obtained by requiring a criminal record certificate, a certificate anyone can get from a police station to show their (lack of) criminal record.

Re: The careless errors of credit reporting agencies

#172

Post by ThomPete »

saryant wrote: post #163
ThomPete wrote: post #108

Earlier quoted context omitted.

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…

There's absolutely no need to take out a penny in loans to build a credit score. That's a myth.

Yet thats exactly what I had to do.

I had to basically fund my own credit for some time and pay it off. All which cost money of course.

As a foreigner thats how it's normally done. At least in a bank like Citibank.

Re: The careless errors of credit reporting agencies

#173

Post by twblalock »

Fezzik wrote: post #36
chrischen wrote: post #6

Earlier quoted context omitted.

I thought you only get 1 free credit report per year?

You can also get free reports through (some) banks and credit cards - Bank of America now provides members an updated FICO score every month and emails a link to access it. One if my credit cards has the same service but I cannot pinpoint which one right now.

Citi, Discover, and American Express also provide real FICO scores (as opposed to the estimates provided by some of the other credit sites).

Re: The careless errors of credit reporting agencies

#174

Post by tacostakohashi »

swalberg wrote: post #118
bsbechtel wrote: post #99

Earlier quoted context omitted.

So do you have a suggestion for a system that works better, or do you prefer banks lend the money from your savings account without any sort of evaluation of how likely it is to be paid back?

I don't think the credit score itself is the problem, it's that it's the only thing banks use. There is no discretion for cases where the mode doesn't have enough information. As one example that has affected me, I moved to the US a year ago. Go to buy a used car last month with bank statements showing a good salary and enough cash to buy the vehicle outright, a check for 1/3 of the car price, and phone numbers of my…

It's a blessing and a curse. Yes, if you've recently moved to the U.S., then you are screwed for your first year or two - need to get a secured credit card, and everything will be a hassle without credit history. Nobody will care about your salary, bank statements, assets or anything.

But then, after 3-4 years, it's pretty damn convenient not needing to mess around with lengthy applications for credit (except for possibly on a mortgage), and having a credit reputation that's completely portable across providers.

It pretty much makes sense that newly arrived residents are a corner case that isn't worth worrying about too much for the banks and credit reporting agencies - at any given time, the number of residents who have been here for less than, say, 2 years is going to be a pretty small, somewhat risky part of the market (less assets in the country, more likely to leave).

Re: The careless errors of credit reporting agencies

#175

Post by scdoshi »

superuser2 wrote: post #128
SystemOut wrote: post #115

Earlier quoted context omitted.

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.

But it's also true that if you come to the US during or after college, banks will not issue you a credit card.

Instead, they will issue you a 'secured' credit card, where you get a $300-500 limit on a card against the same amount paid to the bank as security. Only after a year or 2 of this, will the bank actually issue credit.

Maybe you had an account/history with the bank for a while, and that made a difference?

Re: The careless errors of credit reporting agencies

#176

Post by saryant »

ThomPete wrote: post #172
saryant wrote: post #163

Earlier quoted context omitted.

There's absolutely no need to take out a penny in loans to build a credit score. That's a myth.

Yet thats exactly what I had to do. I had to basically fund my own credit for some time and pay it off. All which cost money of course. As a foreigner thats how it's normally done. At least in a bank like Citibank.

You can open a secured credit card, never use it and after a year convert it to an unsecured credit card, getting your deposit back.

And you would never have been in debt.

Re: The careless errors of credit reporting agencies

#177

Post by ArkyBeagle »

ThomPete wrote: post #149
ArkyBeagle wrote: post #140

Earlier quoted context omitted.

They don't care if you're "good with money". They care that you can demonstrate a habit of making payments on time.

Which is part of being good with money. For instance paying your rent on time. I.e. something that can be proven other ways than using your credit card.

Those are all part of your credit score as well. Er, rather any late payments that get reported may be a part of a credit score.

Re: The careless errors of credit reporting agencies

#178

Post by ThomPete »

saryant wrote: post #160
ThomPete wrote: post #148

Earlier quoted context omitted.

But you are an american right? You spent your whole life in the US? So you have a history with a bank I am assuming. I don't understand exactly why I am being down-voted. The system is at it is it's not something I made up.

Retail banking history is not a factor in credit scores.

I am well aware of that and I never claimed it did. I wasn't talking about credit history but about history as in, a customer in a bank for years. These are also factors for how easy/hard things like this is.

Re: The careless errors of credit reporting agencies

#179

Post by ThomPete »

ArkyBeagle wrote: post #177
ThomPete wrote: post #149

Earlier quoted context omitted.

Which is part of being good with money. For instance paying your rent on time. I.e. something that can be proven other ways than using your credit card.

Those are all part of your credit score as well. Er, rather any late payments that get reported may be a part of a credit score.

Yes once you start paying with your credit card that's not the discussion here. The discussion is how to even get a credit card to begin with.

Being non-american I went trough this and have a pretty good idea on how it works and some of the myths.

I guess some of the confusion is around the before/after a card.

Re: The careless errors of credit reporting agencies

#180

Post by xenadu02 »

xanderstrike wrote: post #59
waterphone wrote: post #12

Earlier quoted context omitted.

Multiple government systems rely on Experian for identity verification. If you don't have credit, you don't exist in the system according to the government. I've run into this personally with healthcare.gov and state medicaid applications, as well as commercial uses like Amazon Payments.

Same. I complained about the rates I was given by my auto insurance company and they said it was because I had no credit. I told them I could easily pay 12 months up front, didn't matter. I told them I could prove my income was more than enough, didn't matter. They told me I should get a credit card. In order to get a service I'm required to have by the government, I had to have my name in a system run by private, fo…

Welcome to America!

I hate it too but I got a student credit card in college and never let it go late. That has paid off many times over the years.

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