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The careless errors of credit reporting agencies

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Re: The careless errors of credit reporting agencies

#231

Post by Meegul »

aboonaboo wrote: post #68
Meegul wrote: post #67

When I turned 18, I decided that it would be a good idea to get a credit report from all three agencies just to check what was on there. I found that there were multiple accounts tied to my credit score from before I was born. Two of the credit agencies removed them fairly easily, but to this day, one of them has refused to remove the accounts. Why? Because I can't prove that I did not live in the area the account wa…

You should sue them

The only reason why I haven't done that, is that the accounts actually have a positive impact on my credit. They're fraudulent, so I am taking action to remove them, but there have been no damages as a result. So, I don't really have a reason to sue other than to save me future hassle.

Re: The careless errors of credit reporting agencies

#232

Post by frognition »

lettergram wrote: post #169
hellogoodbyeeee wrote: post #137

Earlier quoted context omitted.

It sounds like you are at least ten years out of college. Federal regulations have changed and now it is more difficult for a college student to access credit cards

I work for Capital One and their target customer is actually people without credit scores. As far as I know, it's the only company that actually targets these customers as the primary revenue stream and also makes money. The way it works, is they usually only give someone a $500 limit, then double the limit every 6 months If you pay monthly. Once you get a job you can get a bump to $2000 limit with the 1.5% back easy…

Why in the world would you want 100k of credit?

Re: The careless errors of credit reporting agencies

#233

Post by [deleted] »

lettergram wrote: post #169
hellogoodbyeeee wrote: post #137

Earlier quoted context omitted.

It sounds like you are at least ten years out of college. Federal regulations have changed and now it is more difficult for a college student to access credit cards

I work for Capital One and their target customer is actually people without credit scores. As far as I know, it's the only company that actually targets these customers as the primary revenue stream and also makes money. The way it works, is they usually only give someone a $500 limit, then double the limit every 6 months If you pay monthly. Once you get a job you can get a bump to $2000 limit with the 1.5% back easy…

[deleted]

Re: The careless errors of credit reporting agencies

#234

Post by zAy0LfpBZLC8mAC »

superuser2 wrote: post #216
zAy0LfpBZLC8mAC wrote: post #208

Earlier quoted context omitted.

I'm not sure I really propose anything, it's a hard problem. Maybe a more decentralized web-of-trust like identity system would be a good long-term goal? As for authenticating orders to your bank: You should be able to use any compatible product/software you like to sign orders to your bank with your private key. The bank should not have the ability to fake orders to themselves (see also the Wells-Fargo fiasco).

>web-of-trust like identity system The most important thing about a government-level identity system is extreme difficulty of obtaining any identity other than the one you were born with. It seems inevitable in a web of trust that fraud rings would emerge to manufacture identities for those looking to escape debts, criminal convictions, etc by some combination of tricking and bribing people to sign authentications. >…

> It seems inevitable in a web of trust that fraud rings would emerge to manufacture identities for those looking to escape debts, criminal convictions, etc by some combination of tricking and bribing people to sign authentications.

Which could possibly be counteracted by attaching a certain amount of liability to a signature? Also, you potentially can detect fraud rings. But, as I said: I am not really proposing anything.

> I'm not sure you should be able to use, say, a poorly written IE extension on your unpatched Windows XP machine.

Yes, you should, absolutely. Not only is it impossible to enforce anything else, but that's just your own responsibility, just as locking your own home or car or whatever is your own responsibility.

> Something federated would be great, where any manufacturer can technically make something compatible, but it has to meet a FIPS standard or something.

Federated? You mean an open standard? Yes, that would be the idea. But none of the FIPS crap, that never works. Certification only prevents improvements, security fixes and the like, and usually only guarantees a minimum level of security that's worse than what would happen without it.

> Keys could be generated onboard, and then you upload your public key or something.

No, keys are generated however the customer wants to generate them. The customer supplies a public key to the bank, and it's the customer's responsibility to keep the private key secure. If they think a smartcard from a specific vendor is the solution they trust, that's fine, more power to them. If someone else trusts more their own software on an airgapped raspberry pi, they should be able to do that.

> We're getting way ahead of ourselves - banks are extremely hesitant to use anything better than secret numbers. I'd rather a shitty 2FA implementation than that.

I don't. The more technically complicated the authentication system is, the harder it is to make people, and especially courts, understand what the failure modes are, and thus, who should be liable when something goes wrong. Lists of random numbers are relatively easy to understand (especially the fact that a bank obviously knows the "secret" numbers and thus cannot really prove that they got it from you).

Re: The careless errors of credit reporting agencies

#235

Post by YokoZar »

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.

If you have a very long history with a bank, however, that might factor into that bank's decision in giving you a credit card. Nothing stops banks from combining credit score data with other sources.

As a personal anecdote, I avoided credit cards until age 31, but had a bank account with Wells Fargo since I was 16. Because I had no history, almost no one wanted to give me a card despite my high provable income. I got my first credit card with capital one (for a hilarious 300 dollar limit).

But two months later after I became a known credit card user I started getting credit card offers in the mail from a variety of sources -- Wells Fargo offered me considerably more credit than the others, presumably because some system of theirs thought I was more trustworthy (long-standing account history? Actual visible income in the bank account?) They even offered me a rewards card even though I only had 1 month of history.

Re: The careless errors of credit reporting agencies

#236

Post by kd0amg »

apatters wrote: post #158
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?

The banks have a profit motive for assessing credit risk accurately. They are the ones who make money if this is done right. So why don't the banks pay for it? Why are we subsidizing the banks' business model by paying for credit reports at all? I don't have to pay if I want to receive more than one bank account statement per year, and bank accounts are another product the bank uses to make money off of me, just like…

The banks have a profit motive for assessing credit risk accurately.

They have a clear incentive to not underestimate prospective borrowers' credit risk (or they'll lose more in defaults than they gain in interest), but the only incentive to not overestimate someone's credit risk is that someone else might offer a loan on better terms. Even if they are aware of flaws in their assessment process that overestimate a borrower's risk, they probably feel safe in the knowledge that everyone else is using that same process and will overestimate risk in the same way. A more accurate credit assessor could profit from this situation ("get your credit reports from us, and you can undercut lenders who rely on the big three"), but the barrier to entry is rather high.

Re: The careless errors of credit reporting agencies

#237

Post by cardiffspaceman »

frognition wrote: post #232
lettergram wrote: post #169

Earlier quoted context omitted.

I work for Capital One and their target customer is actually people without credit scores. As far as I know, it's the only company that actually targets these customers as the primary revenue stream and also makes money. The way it works, is they usually only give someone a $500 limit, then double the limit every 6 months If you pay monthly. Once you get a job you can get a bump to $2000 limit with the 1.5% back easy…

Why in the world would you want 100k of credit?

Even if you're very flush it's handy to have the ability to use a credit card for a transaction because your checkbook is at home. Maybe you want to buy something and then sell some stock when you get home to pay for it? Credit is handy when you don't need it. I would imagine :)

Re: The careless errors of credit reporting agencies

#238

Post by mikeash »

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…

I don't see what's so strange about this. Let's say you were lending money. Would you prefer to lend it to a person with an established history of taking out and then paying back loans, or a person with zero history either way?

I don't think it's accurate to describe the system as starting out not trusted. There are many levels, and misbehavior can easily give you worse credit than the default. You start out neutral and then go up or down depending on what you do. Which seems like exactly how it should be.

Re: The careless errors of credit reporting agencies

#239

Post by mikeash »

frognition wrote: post #232
lettergram wrote: post #169

Earlier quoted context omitted.

I work for Capital One and their target customer is actually people without credit scores. As far as I know, it's the only company that actually targets these customers as the primary revenue stream and also makes money. The way it works, is they usually only give someone a $500 limit, then double the limit every 6 months If you pay monthly. Once you get a job you can get a bump to $2000 limit with the 1.5% back easy…

Why in the world would you want 100k of credit?

Speaking only for myself, my total credit limits are huge because my wife likes signing up for new cards to take advantage of special offers and rewards programs. We don't use anything like that much credit, but it's available to us.

Re: The careless errors of credit reporting agencies

#240

Post by mikeash »

popmystack wrote: post #228
superuser2 wrote: post #219

Earlier quoted context omitted.

>Credit card management has no indication how I'll manage a loan (whether a house or car) due to the nature of spending and utilization I think the actuary-types who design the scoring models would disagree vehemently with this one. Scoring models are built from regressions on actual default rates.

Considering renting history is not accurately reported in any meaningful form, I don't know how they disagree with me. Most people probably aren't willing to give up their car, I'd figure those that have credit issues are still most likely making car payments. It's one thing to say "I see you've been late on a few of your car payments, so we're going to give a higher interest rate." and it's something else to say "Yo…

Accurately predicting your likelihood of default is worth a ton of money. If every company makes bad assumptions like you describe, then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise.

That doesn't mean that systematic failures can't happen, but they're pretty unlikely. It's much more likely that you underestimate the correlation between these disparate defaults than that the banks overestimate it.

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