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FICO and the Credit Bureau Cartel

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Re: FICO and the Credit Bureau Cartel

#111

Post by Workaccount2 »

balderdash wrote: post #106
Workaccount2 wrote: post #73

Earlier quoted context omitted.

I have an 800 score while always being tight with my wallet. The most valuable thing to lenders is someone who can 100% be counted on to always pay, even if things outside their control turn against them. People chronically fail to understand this, and end up putting themselves in financially precarious situations i.e. paycheck-to-paycheck living.

Yes, but credit scores penalise people for many actions that have more to do with being perceived to bad customers than bad credit risks.payment history is only 35% of your score and and if you add it credit utilization, your only talking about ~2/3s of the score… You can’t get a perfect score if you change credit cards on a regular basis or cancel a zero balance card, people have worse credit because they paid off t…

I have an 800 score and never had student loans, a mortgage, or a car loan. Just credit cards. Whatever app always tells me my diversity is low, but I still have perfect credit.

This is entirely from just 3 credit cards over 10 years, but I'm pretty sure I was at 800 by year 3 or 4.

People so chronically over-extend their finances that looking around, they have no idea they are over extended. It's like overweight people looking around and thinking their weight is normal and their diet is good.

Re: FICO and the Credit Bureau Cartel

#112

Post by Dalewyn »

0x5f3759df-i wrote: post #110
vundercind wrote: post #82

Earlier quoted context omitted.

A lot of things in the US would change for the better if we installed a new government for ourselves using the techniques we have when we assist or replace foreign governments. There’s a ton of stuff we have and do, including some fundamental stuff (our system of voting, for one) that’s known to be really bad compared to the “state of the art”. But, in part because of some of those bad elements, we only ever get to a…

Yep, there’s a reason we didn’t give Germany and Japan our “exceptional” electoral college system. Tech debt exists in constitutional law as well.

The Electoral College exists as a compromise regarding two needs:

* The need to keep the Executive and Legislative Branches separate.

* The need to represent States in a manner they already agree with, for sake of brevity.

Thus the Electoral College: Composed in the same way as Congress is (plus pretending D.C. is a state) whose sole task is electing the head of the Executive Branch as representatives of the States thereof.

Japan (and Germany? I don't know enough about German politics) is based on the UK's Westminster system, which has its own pros and cons and isn't necessarily better.

Re: FICO and the Credit Bureau Cartel

#113

Post by Dalewyn »

balderdash wrote: post #106
Workaccount2 wrote: post #73

Earlier quoted context omitted.

I have an 800 score while always being tight with my wallet. The most valuable thing to lenders is someone who can 100% be counted on to always pay, even if things outside their control turn against them. People chronically fail to understand this, and end up putting themselves in financially precarious situations i.e. paycheck-to-paycheck living.

Yes, but credit scores penalise people for many actions that have more to do with being perceived to bad customers than bad credit risks.payment history is only 35% of your score and and if you add it credit utilization, your only talking about ~2/3s of the score… You can’t get a perfect score if you change credit cards on a regular basis or cancel a zero balance card, people have worse credit because they paid off t…

A closed line of credit (eg: closed credit card, paid off loan) will fall off your credit report after about 7 years, lowering your score.

Having many inquiries from asking for new credit cards frequently implies you're trying to take on a lot of debt, which is a higher risk factor and thus lowers your score.

Buying with cash means you didn't take on debt, so that obviously doesn't factor into your credit score.

Parent is right, people (such as yourself) chronically don't understand how finances work.

Re: FICO and the Credit Bureau Cartel

#114

Post by nullc »

balderdash wrote: post #51

The ridiculous thing is that the FICO score is so focused on commercial profitability rather than risk. You get lower score if you as a consumer optimise your cost of credit, price shopping/taking advantage of new rates/offers… it’s really a credit and likely profitability score

meh, that's not true. it's easy to have a top score while never paying lenders a dollar in profit. You just have to follow instructions online to juice your accounts by opening the right kinds and using them the right ways (e.g. keeping your usage below a threshold percentage of your limits).

The credit score is essentially price discrimination predicated on customers not being able to find and follow instructions. It also happens to give poor scores to people who are credit risks, but the difference between a meh score and a high one is mostly your ability to munchkin a bit.

[Edit: just checked, mine is 808.]

Re: FICO and the Credit Bureau Cartel

#115

Post by supertrope »

JackFr wrote: post #55
short_sells_poo wrote: post #40

Earlier quoted context omitted.

I think what parent actually means is that there are better solutions for it than insurance. E.g. a central registry of ownership and liens would probably solve 99% of the cases that you need insurance for. The insurance is a scam in the way that there are technical solutions that would obviate the need for this "service", but that solution is against the interests of the service providers. Very much like tax returns…

In those cases where the government handles recording all transfer, there is typically a fund which covers loss due to fraudulent or erroneous transfers. Thus there is still title insurance, it's just hidden from view.

A lot of Americans would rather pay $1000 to a private service than $900 in higher taxes. It's the principle of the matter. Government bad. Privatization, "choice" between the oligopoly businesses, and public-private partnerships good.

Re: FICO and the Credit Bureau Cartel

#116

Post by jjav »

alistairSH wrote: post #28
Harmohit wrote: post #2

I wonder if open source software can play a role in this. Maybe we can have an open source algorithm for determining credit ratings and private companies only provide a secure database of ratings. It will also offer the lay person insights into how the credit rating is exactly determined. They can know what is causing their rating to be less than desired and take appropriate action, instead of watching a random youtu…

Not only do banks and credit agencies provide a "recipe" for improving your score, most do so free of charge (for existing customers). For example, I know my score swings by +/-30 points/month. I'm fairly confident that is due to the balance on my CCs varying when the score is calculated (there is nothing else about my financial situation changing - same house for a decade, same car loan for 5 years, no new credit li…

> I'm fairly confident that is due to the balance on my CCs varying when the score is calculated

Yes. It feels wrong that the current balance of credit cards is considered debt. It should only be considered debt once (if) you start paying interest on it. So if you pay it off fully every month, it shouldn't be seen as debt.

But whatever, they consider it debt so it can make the credit score swing up and down a lot. I see this every late summer when I pay my childs school bill for the upcoming year on a credit card. It is a very large amount so suddenly my credit utilization goes up and my credit score drops around ~70 points. Then a month later I pay it off and the credit score goes back up the same ~70 points.

Re: FICO and the Credit Bureau Cartel

#117

Post by vundercind »

Dalewyn wrote: post #112
0x5f3759df-i wrote: post #110

Earlier quoted context omitted.

Yep, there’s a reason we didn’t give Germany and Japan our “exceptional” electoral college system. Tech debt exists in constitutional law as well.

The Electoral College exists as a compromise regarding two needs: * The need to keep the Executive and Legislative Branches separate. * The need to represent States in a manner they already agree with, for sake of brevity. Thus the Electoral College: Composed in the same way as Congress is (plus pretending D.C. is a state) whose sole task is electing the head of the Executive Branch as representatives of the States t…

The idea of choosing wise locals to go judge the candidates and choose on our behalf (since a general election for president is kinda crazy—they were right about that) fell apart pretty much instantly when we started actually holding elections, making the institution all but pointless except for presenting opportunities to attack our democracy with weird procedural shit because it’s more complicated than it needs to be (see, ahem, certain recent events).

We don’t need the College to weight the vote toward states without people in them, if that’s what we want to do. Even if we accept that that’s a good goal, the College is not a good way to do it.

Re: FICO and the Credit Bureau Cartel

#118

Post by dragonwriter »

BizarroLand wrote: post #103
supertrope wrote: post #102

Earlier quoted context omitted.

>replace foreign government Like a CIA sponsored military coup? Or aerial bombing?

From what I gather in the Federalist Society Papers, the original intent was that we would reinvent our country every 25 years or so, draft a new constitution and incorporate all of the changes that we needed to continue to function with the precept of being a great society, "Of the people, by the people, for the people". However, requiring 100% of states to affirm the new constitution was difficult enough in 1776 wh…

> From what I gather in the Federalist Society Papers, the original intent was that we would reinvent our country every 25 years or so

I think you are confusing in name the Federalist Papers with the modern and, except in attempt to steal glory, unrelated Federalist Society, and confusing in substance the Federalist Papers with a letter written by Thomas Jefferson to John Adams in which he expressed the conclusion that all laws (incl. Cobstitutions) must, based on then-current actuarial data, sunset in approximately that timeframe to avoid the living being ruled over by the dead.

Re: FICO and the Credit Bureau Cartel

#119

Post by eszed »

BizarroLand wrote: post #103
supertrope wrote: post #102

Earlier quoted context omitted.

>replace foreign government Like a CIA sponsored military coup? Or aerial bombing?

From what I gather in the Federalist Society Papers, the original intent was that we would reinvent our country every 25 years or so, draft a new constitution and incorporate all of the changes that we needed to continue to function with the precept of being a great society, "Of the people, by the people, for the people". However, requiring 100% of states to affirm the new constitution was difficult enough in 1776 wh…

Just to be pedantic: constitutional amendments, in the USA, require a maximum of 75% of the states to agree. Minimally 66.6% (repeating, of course) of them to call a constitutional convention, and ratify the results.

None of that challenges your important points about the intentions of the founders, nor the difficulties upon which their project has run around.

Re: FICO and the Credit Bureau Cartel

#120

Post by Dalewyn »

vundercind wrote: post #117
Dalewyn wrote: post #112

Earlier quoted context omitted.

The Electoral College exists as a compromise regarding two needs: * The need to keep the Executive and Legislative Branches separate. * The need to represent States in a manner they already agree with, for sake of brevity. Thus the Electoral College: Composed in the same way as Congress is (plus pretending D.C. is a state) whose sole task is electing the head of the Executive Branch as representatives of the States t…

The idea of choosing wise locals to go judge the candidates and choose on our behalf (since a general election for president is kinda crazy—they were right about that) fell apart pretty much instantly when we started actually holding elections, making the institution all but pointless except for presenting opportunities to attack our democracy with weird procedural shit because it’s more complicated than it needs to…

The thing is it's not the citizens of a State choosing the POTUS, it's the citizens of a State choosing which candidate their State will choose for POTUS.

Remember, the US is a federation of sovereign States and POTUS as Chief Executive of the Federal government represents and is chosen by the States thereof. Each State represents its citizens respectively.

The reason the College gives more weight to less populous States is, again, the need to represent States at the federal level in a way they already agree with but separated from the Legislature. So each State gets 2 Electors plus at least 1 Elector according to their population, representing the Senators and Representatives they would have in Congress. Remember that the Senate gives equal representation to all States regardless of population; California and Rhode Island each have the same representation in the Senate.

Part of the reason Japan doesn't have an Electoral College is because they aren't as concerned about separating the Executive and Legislative Branches and they aren't a federation of sovereign States.

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