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How Equifax Became a Private IRS

mattstoller.substack.com

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Re: How Equifax Became a Private IRS

#21

Post by Retric »

refurb wrote: post #14
nimbius wrote: post #2

A cogent argument could.be made that transunion, Equifax, and other big private credit clearinghouses act as direct agents of an unspoken american "social credit" system in which the credit score denies housing and employment to those who refuse to or cannot conform to a largely invisible tome of rules. These agents are then unpoliced as they serve capitalisms direct need for an underclass. Full disclosure: I am a co…

If “paying you debts” is an “invisible tome of rules” then I’m all for it. Let’s be honest, credit score pretty accurately reflect what they are supposed to measure - credit worthiness.

The issue is the rules include things like lowered scores after paying off a home loan and companies are using these scores for things that have nothing to do with the likelihood of paying back a loan.

They don’t even do a very good job of what’s intended as people can literally have an 800 score the week before declaring bankruptcy.

Re: How Equifax Became a Private IRS

#22

Post by epgui »

33955985 wrote: post #19
refurb wrote: post #14

Earlier quoted context omitted.

If “paying you debts” is an “invisible tome of rules” then I’m all for it. Let’s be honest, credit score pretty accurately reflect what they are supposed to measure - credit worthiness.

A reasonable take if you ignore how this system reinforces existing inequality + the ways this system is used outside its original scope. Also you have to admit it’s kind of fucked up that there’s no total opt out mechanism.

It's also super Kafkaesque, because there is no way for you to know why your score is exactly what it is. There is no published rule book or methodology.

Re: How Equifax Became a Private IRS

#23

Post by jorf »

seanmcdirmid wrote: post #15
radicaldreamer wrote: post #7

Earlier quoted context omitted.

Those are not the only rules though... you can have low credit for not taking out enough loans and not having debt. You get dinged for opening and closing credit card accounts too quickly, even if you've never missed a payment. Your score goes down if you simply inquire about loans a bit too often... All of these are "rules" made up unilaterally by the credit bureaus.

Those are minor and often temporary dings compared to not paying back loans on time or at all. For example, if you don’t have a loan history, your score isn’t low enough that you can’t get an apartment or get a car loan. Then by doing those things you can build credit. The other things, open and closing accounts too quickly, or making lots of loan inquiries over a short period of time, lead to temporary dings that re…

> if you don’t have a loan history, your score isn’t low enough that you can’t get an apartment

This is not true. Many places will deny an applicant for zero loan history, effectively forcing people to get a credit card in order to obtain housing.

Re: How Equifax Became a Private IRS

#24

Post by epgui »

corytheboyd wrote: post #17
refurb wrote: post #14

Earlier quoted context omitted.

If “paying you debts” is an “invisible tome of rules” then I’m all for it. Let’s be honest, credit score pretty accurately reflect what they are supposed to measure - credit worthiness.

I would not loan someone thousands of dollars on a "trust me bro", so I wouldn't expect banks to either. Corruption of the authority judging trustworthiness is bad, but there just needs to be an authority doing this. The real problem is more likely that wages and living expenses are not in sync, which just fucks over the poor people. Using credit to avoid literally dying on the street is more a symptom of wages makin…

> there just needs to be an authority doing this

People will tolerate even the harshest laws if they feel like they are applied fairly.

But in this case there is no published rule book, and no published methodology for calculating credit scores. There is not even the most basic transparency.

Re: How Equifax Became a Private IRS

#25

Post by bix6 »

xxpor wrote: post #4
nimbius wrote: post #2

A cogent argument could.be made that transunion, Equifax, and other big private credit clearinghouses act as direct agents of an unspoken american "social credit" system in which the credit score denies housing and employment to those who refuse to or cannot conform to a largely invisible tome of rules. These agents are then unpoliced as they serve capitalisms direct need for an underclass. Full disclosure: I am a co…

I see where you're coming from, but on the other hand, the biggest rules are well known and quite simple: If you take a loan and pay it back on time, you'll have high credit. If you fail to meet your obligations, you won't. The existence of an underclass which is constantly on the edge of not being able to pay their bills is true though.

Many people I’ve talked to have very little idea what the factors affecting their credit scores are. Many are unaware or uninterested. I have helped many people improve their credit scores because I have spent hours learning how to game this system. Much of this information is not taught to people until they need credit at which point it’s too late to start establishing a history and your best bet is some bs predatory card that locks up more money than you can afford.

Re: How Equifax Became a Private IRS

#26

Post by coderintherye »

One thing Matt mentions but doesn't go into is how this could (should?) be a government service. In fact, there is the IRS's IVES program: https://www.irs.gov/individuals/international-taxpayers/inco... but it is already fairly antiquated.

There's a great opportunity here for the IRS to provide this service (with revenue from charging the requesting entities), with citizens being self-sovereign over what data is shared and who it is shared with. Especially because they could provide verified data in a very narrow scope (for instance only sharing Adjusted Gross Income and nothing else).

Re: How Equifax Became a Private IRS

#27

Post by corytheboyd »

epgui wrote: post #24
corytheboyd wrote: post #17

Earlier quoted context omitted.

I would not loan someone thousands of dollars on a "trust me bro", so I wouldn't expect banks to either. Corruption of the authority judging trustworthiness is bad, but there just needs to be an authority doing this. The real problem is more likely that wages and living expenses are not in sync, which just fucks over the poor people. Using credit to avoid literally dying on the street is more a symptom of wages makin…

> there just needs to be an authority doing this People will tolerate even the harshest laws if they feel like they are applied fairly. But in this case there is no published rule book, and no published methodology for calculating credit scores. There is not even the most basic transparency.

Don't get me wrong I'd love to see the rule book too. Would you trust the rules though? There will always be the mysterious few with the power. I wish we could just have nice things without corruption :/

Re: How Equifax Became a Private IRS

#28

Post by kevin_thibedeau »

coderintherye wrote: post #26

One thing Matt mentions but doesn't go into is how this could (should?) be a government service. In fact, there is the IRS's IVES program: https://www.irs.gov/individuals/international-taxpayers/inco... but it is already fairly antiquated. There's a great opportunity here for the IRS to provide this service (with revenue from charging the requesting entities), with citizens being self-sovereign over what data is shar…

Equifax collects data that isn't true and libels its victims by disseminating it to other parties. Having that power enshrined within the government would not be a good thing.

Re: How Equifax Became a Private IRS

#29

Post by piyh »

Retric wrote: post #21
refurb wrote: post #14

Earlier quoted context omitted.

If “paying you debts” is an “invisible tome of rules” then I’m all for it. Let’s be honest, credit score pretty accurately reflect what they are supposed to measure - credit worthiness.

The issue is the rules include things like lowered scores after paying off a home loan and companies are using these scores for things that have nothing to do with the likelihood of paying back a loan. They don’t even do a very good job of what’s intended as people can literally have an 800 score the week before declaring bankruptcy.

It's a score, not a fortune teller. It's for financial modeling, and only one thing of many that lenders look at.

Re: How Equifax Became a Private IRS

#30

Post by sidewndr46 »

xxpor wrote: post #4
nimbius wrote: post #2

A cogent argument could.be made that transunion, Equifax, and other big private credit clearinghouses act as direct agents of an unspoken american "social credit" system in which the credit score denies housing and employment to those who refuse to or cannot conform to a largely invisible tome of rules. These agents are then unpoliced as they serve capitalisms direct need for an underclass. Full disclosure: I am a co…

I see where you're coming from, but on the other hand, the biggest rules are well known and quite simple: If you take a loan and pay it back on time, you'll have high credit. If you fail to meet your obligations, you won't. The existence of an underclass which is constantly on the edge of not being able to pay their bills is true though.

No, that isn't even remotely how it works. My credit score has gone down consistently after getting rid of all my debt.
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