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FICO to incorporate buy-now-pay-later loans into credit scores

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Re: FICO to incorporate buy-now-pay-later loans into credit scores

#171

Post by astura »

msgodel wrote: post #55
PostOnce wrote: post #13

Theoretically, credit should be used for one thing: to make more money. (not less) However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later. At some point, you run out of hours available and the house of cards collapses. i.e., credi…

I tried using one of these offering a 0% intro APR to finance an upgrade to the boat I eventually moved into (saving me 10s of thousands in rent.) They wouldn't let me do it despite having an upper 700s credit score. It's not clear to me how they pick people to lend to.

0% intro APR offers are somewhat predatory in that they rely on a large portion of people keeping a balance after the intro period in order to be offered, or at least building a relationship with other financial products. It wouldn't surprise me that they would reject someone in the high 700s, they might have been looking more for people in the low to mid 600s.

There's also a lot of reasons one might be rejected for a credit line that have nothing to do with credit score. Some lenders have specific policies in addition to credit score, like Chase's 5/24 rule. Some are also just looking for "relationships" and won't offer you their best products unless you have a bank account with them, etc.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#174

Post by zblevins »

andruby wrote: post #118
PostOnce wrote: post #13

Theoretically, credit should be used for one thing: to make more money. (not less) However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later. At some point, you run out of hours available and the house of cards collapses. i.e., credi…

Do you also think that way about buying a house with a mortgage (credit)? I don't. A mortgage isn't used to make more money. It's used so people can own a house after saving for a few years, rather than waiting until they've saved for a few decades.

Yes, though I’d add that a house is generally viewed as an investment, unlike something like a car, which typically depreciates in value.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#175

Post by paxys »

lm28469 wrote: post #91
PostOnce wrote: post #13

Theoretically, credit should be used for one thing: to make more money. (not less) However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later. At some point, you run out of hours available and the house of cards collapses. i.e., credi…

> the average person is using The "average person" is told from birth to consume as many things and experiences as possible as it if was the only thing that could give their life a meaning. The entire system is based on growth and consumption, I have a hard time blaming "the average person"

Average *American

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#176

Post by rwmj »

jltsiren wrote: post #130
leereeves wrote: post #120

Earlier quoted context omitted.

Often, a mortgage is either used to make money (from rising house prices) or save money (when the mortgage is cheaper than rent).

Often, houses are depreciating assets that are expensive to maintain, but people take mortgage and buy them anyway. Often, renting is cheaper than buying, but people buy anyway, because they like the idea of owning their home. Often, people buy a home, because suitable homes are not available to rent. Money is only a means to an end. It has no inherent value. And very often, the subjective value of a thing is essenti…

In addition, you get countries like the UK where renting is very precarious. You might be forced to move every year, after a year your landlord can turf you out with only a few months' notice, you aren't allowed to modify the house in any way even putting a picture-hook into the wall or redecorating a room, etc. Since most people cannot afford to buy a house outright, a mortgage is necessary to avoid this.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#177

Post by alpinisme »

hk1337 wrote: post #170
andruby wrote: post #118

Earlier quoted context omitted.

Do you also think that way about buying a house with a mortgage (credit)? I don't. A mortgage isn't used to make more money. It's used so people can own a house after saving for a few years, rather than waiting until they've saved for a few decades.

- They’re giving you a line of credit, money you don’t have, to buy a house. - Why else would mortgage loans ave percentage rates if not to make money off lending you money?

The parent comment was about how you should only take loans if you expect a return on the investment greater than the interest. Not about the bank.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#178

Post by walthamstow »

hk1337 wrote: post #170
andruby wrote: post #118

Earlier quoted context omitted.

Do you also think that way about buying a house with a mortgage (credit)? I don't. A mortgage isn't used to make more money. It's used so people can own a house after saving for a few years, rather than waiting until they've saved for a few decades.

- They’re giving you a line of credit, money you don’t have, to buy a house. - Why else would mortgage loans ave percentage rates if not to make money off lending you money?

I think you've misread. The thread is about consumers of credit using it to make themselves money.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#179

Post by rayiner »

lm28469 wrote: post #91
PostOnce wrote: post #13

Theoretically, credit should be used for one thing: to make more money. (not less) However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later. At some point, you run out of hours available and the house of cards collapses. i.e., credi…

> the average person is using The "average person" is told from birth to consume as many things and experiences as possible as it if was the only thing that could give their life a meaning. The entire system is based on growth and consumption, I have a hard time blaming "the average person"

There is no “system.” It’s all just people making choices. My wife puts straws in the dishwasher to reuse them. She grew up in America the same as everyone else.

Re: FICO to incorporate buy-now-pay-later loans into credit scores

#180

Post by SecretDreams »

paxys wrote: post #175
lm28469 wrote: post #91

Earlier quoted context omitted.

> the average person is using The "average person" is told from birth to consume as many things and experiences as possible as it if was the only thing that could give their life a meaning. The entire system is based on growth and consumption, I have a hard time blaming "the average person"

Average *American

Probably average "any country where it's common to own a car for less than 10 years" tbh.
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