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IMF working paper suggests using browsing history in credit score calculations

extremetech.com

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Re: IMF working paper suggests using browsing history in credit score calculations

#81

Post by SQueeeeeL »

throwawaygh wrote: post #58
archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

> To start throwing nonsensical parameters like browsing history into the equation is second derivative asinine. And trivially exploitable... > Credit scores are so fundamentally broken anyway. The bigger problem is that the organizations designing credit scores (and alternative metrics) are incompetent.

Organizations are allowed to be incompetent. The real problem is they have buy in from other industries with major decision making abilities and the government has provided us no protections from them.

If Equifax went out of business today, you'd have 5 new equally shitty credit companies trying to get their market share.

Re: IMF working paper suggests using browsing history in credit score calculations

#82

Post by devmor »

travoc wrote: post #53
archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

Can you tell us who is giving out large loans without verifying income?

I've never had my income verified for anything less than a car loan. Every revolving credit account has taken me at my word.

Re: IMF working paper suggests using browsing history in credit score calculations

#83

Post by devmor »

rafale wrote: post #78
runako wrote: post #74

Earlier quoted context omitted.

All major US credit card issuers. Many auto lenders. Most of consumer credit outside of mortgages operates without any real income verification. Here, "large" runs at least up to $50k-$100k per lender without any meaningful income verification.

They usually ask you for your income in the credit card application. If you lie, you may be committing credit card fraud.

Hence, the key word "VERIFYING"

Re: IMF working paper suggests using browsing history in credit score calculations

#84

Post by jedimastert »

gruez wrote: post #75
archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

>Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes, I'm credit-worthy because my income makes it possible to service my debt? Is this supposed to be better? Right now I can apply and get credit cards without mailing my paystub. That actually seems better than companies having regular updates of my inco…

Most credit cards adjust credit limits based on income levels

Re: IMF working paper suggests using browsing history in credit score calculations

#85

Post by ravel-bar-foo »

yorwba wrote: post #38
rootsudo wrote: post #3

Hey, they got that system in place already in China! https://en.wikipedia.org/wiki/Social_Credit_System Go to HackerNews, post a dissenting topic, enjoy no travel or credit! Work in a high compliance job where you have to submit financials yearly, no more!

> Hey, they got that system in place already in China! https://en.wikipedia.org/wiki/Social_Credit_System From your link: "By 2020,[needs update] it was intended to standardize the assessment of citizens' and businesses' economic and social reputation, or 'Social Credit'." It's 2021 now and the "Social" part of "Social Credit" is still science-fiction, let alone somebody's web history affecting their ability to obtai…

In 2018 there were announcements on Chinese trains that smoking in the bathrooms would affect your social credit score. In Mandarin and in English.

I don't know how it is implemented, but I would be surprised if it wasn't.

Re: IMF working paper suggests using browsing history in credit score calculations

#86

Post by intended »

archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

That is apples and oranges.

I’m not using an EBITDA/MV equation on my personal valuation, nor am I using FCF for any credit calculation.

Credit calculations are based on the most reliable data points that correlate with outcomes I care about.

Frankly, new tech is helping credit calculations - people are using phone call data to find what correlates with credit worthiness. I believe this is already in production around the world.

Whether the term “credit scores” is used or not, there will always be some mechanistic way to value risk. It will also use whatever data we have lying around to do so.

If we have no data, then it goes back to the good old days of the boys club, which is even more restricting Thant today.

Re: IMF working paper suggests using browsing history in credit score calculations

#87

Post by PragmaticPulp »

archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

> Why then do we not take income into account in credit worthiness?

Income is definitely considered in large loans. You’re not going to get a mortgage or a car loan on your credit score alone.

Credit firms also collect a lot of payroll data, but it’s kept separate from what you know as your credit score because they inherently can’t have payroll data for everyone that also has credit history data. The scores must be kept separate as a result.

Here’s just one example of credit worthiness companies expanding their payroll data collection: https://krebsonsecurity.com/2021/07/intuit-to-share-payroll-...

Re: IMF working paper suggests using browsing history in credit score calculations

#88

Post by tjpnz »

lettergram wrote: post #47

Those over at https://patriots.win have been claiming this has been the plan for years. A slow move to a CCP style credit system and world government, led by the IMF (control through finances) and WHO (health experts managing governance) Even the vice chair of Berkshire Hathaway has said he wanted a Chinese style system (among many others): https://www.cnn.com/2021/06/30/investing/charlie-munger-chin... It’s been rea…

>A slow move to a CCP style credit system and world government, led by the IMF (control through finances) and WHO (health experts managing governance)

Even if this were credible I'm not worried. The WHO has shown itself incapable of leading anything.

Re: IMF working paper suggests using browsing history in credit score calculations

#89

Post by ballenf »

gruez wrote: post #75
archildress wrote: post #48

Credit scores are so fundamentally broken anyway. In financial analysis of a company, the number one item you tend to look at is "free cash flow" - the "cash available for the company to repay creditors or pay dividends and interest to investors." [1] Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes,…

>Why then do we not take income into account in credit worthiness? Why do I not periodically upload my W2 or tax return to the credit bureaus in order to show that yes, I'm credit-worthy because my income makes it possible to service my debt? Is this supposed to be better? Right now I can apply and get credit cards without mailing my paystub. That actually seems better than companies having regular updates of my inco…

https://krebsonsecurity.com/2017/11/how-to-opt-out-of-equifa...

Your pay history is probably sent out to all your creditors, unless you've opted out.

Re: IMF working paper suggests using browsing history in credit score calculations

#90

Post by intended »

devmor wrote: post #83
rafale wrote: post #78

Earlier quoted context omitted.

They usually ask you for your income in the credit card application. If you lie, you may be committing credit card fraud.

Hence, the key word "VERIFYING"

These issues are abstracted by the delinquency rate. Some X% will not pay on time.

By reducing the information taken, do we add sufficient additional users to overcome the X% loss expected.

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