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How Equifax Became a Private IRS

mattstoller.substack.com

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Re: How Equifax Became a Private IRS

#31

Post by vuln »

bix6 wrote: post #25
xxpor wrote: post #4

Earlier quoted context omitted.

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 predator…

Have you thought about publishing your tactics in gaming the credit system?

Re: How Equifax Became a Private IRS

#32

Post by 33955985 »

epgui wrote: post #22
33955985 wrote: post #19

Earlier quoted context omitted.

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.

Yep. It’s all a secret. You are measured by an invisible system that you can’t opt-out of, can’t question… oh and just in case you thought you could learn from experience, here comes a newer “version” of the score that determines whether you’re allowed to build equity or whether you’re relegated to paying someone else’s mortgage.

Re: How Equifax Became a Private IRS

#33

Post by medvezhenok »

BuyMyBitcoins wrote: post #10
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.

I have a few credit cards that I no longer use. If I cancel them my score would go down because the average age/length credit history would go down. Not by that much, but it is surprising that leaving these cards open is incentivized whereas the more secure and less risky thing to do would be to close those accounts.

The closed card drops off your account history after ~10 years, so your score shouldn't immediately go down. Technically, I'm not sure that the credit scores can differentiate between you closing a card and the bank closing your card (the latter might be some sort of signal of potential change in creditworthiness)

In general, credit scores are optimized for the average consumer - and so behaviors around the edges don't always make sense in terms of your score going up or down. If you think about the system that was replaced by credit cards (i.e. keeping a tab open with many different stores), you'd be hard pressed to say that the amount of credit extended is lower now (overall), than under the old system. Whether that's a good thing or not is a different question.

Re: How Equifax Became a Private IRS

#34

Post by medvezhenok »

mattnewton wrote: post #11
BuyMyBitcoins wrote: post #10

Earlier quoted context omitted.

I have a few credit cards that I no longer use. If I cancel them my score would go down because the average age/length credit history would go down. Not by that much, but it is surprising that leaving these cards open is incentivized whereas the more secure and less risky thing to do would be to close those accounts.

It make a a bit more sense when you think about it - Risk isn’t really the main thing incentivized here, making interest payments is haha. Risky lenders don’t make payments, but neither do people who never take on debt

Credit scores actually are designed to measure risk, not interest payments. Otherwise high credit utilization would be a positive:) There are certainly edge cases where the score has low predictive value, but overall the correlation between credit score and risk is quite large.

Re: How Equifax Became a Private IRS

#35

Post by kube-system »

jorf wrote: post #23
seanmcdirmid wrote: post #15

Earlier quoted context omitted.

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.

Technically, people with no credit history aren't denied for having low score -- they're denied for not having a score at all.

Re: How Equifax Became a Private IRS

#36

Post by vuln »

kevin_thibedeau wrote: post #28
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.

Only when you give said company authorization to review your credit worthiness, then they may attempt to pull your credit information.

Your information is not broadcasted to all companies in existence only those who you've authorized (or have been authorized on your behalf by a malicious actor / identify thief).

This is not udp.

Re: How Equifax Became a Private IRS

#37

Post by atdrummond »

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.

My credit is tanked from an ex opening up accounts in my name and running up the tab while I was being treated for leukaemia and Crohns. Six years later and I’m still fixing the damage.

Re: How Equifax Became a Private IRS

#38

Post by medvezhenok »

vuln wrote: post #31
bix6 wrote: post #25

Earlier quoted context omitted.

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 predator…

Have you thought about publishing your tactics in gaming the credit system?

There are already tons of articles and videos that have already been published on this. And now Experian / other bureaus offer score breakdowns along with calculators where you can explore how hypothetical actions would affect your score. I think the space is pretty well covered:)

(For an example, Google for AskSebby - How to Increase Your Credit Score)

Re: How Equifax Became a Private IRS

#39

Post by jasonjayr »

kevin_thibedeau wrote: post #28
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.

Why?

Government answers to it's people.

Equifax answers to it's shareholders.

IRS already has that info. The people have the power to control and influence how that data is handled, and distributed. We have no power to compel Equifax to do anything.

Re: How Equifax Became a Private IRS

#40

Post by refurb »

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.

That makes no sense.

How does “checking if people are credit worthy” reinforce inequity? If you can’t repay, you shouldn’t be taking on debt. If anything it prevents people from taking on debt they can’t afford, stopping them from further inequity.

And you can opt out. Don’t use credit at all. (edit: of course a credit record will still exist, but it won't matter if you don't use credit)

This sounds like a bunch of people complaining “why can’t I just borrow whatever I want without people checking whether I can repay?”

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