IMF researchers: digital footprint yields better credit assessment • Hacker News Board

Re: IMF researchers: digital footprint yields better credit assessment

#21

Post by thereisnospork » Fri, Feb 12, 2021, 11:56 PM UTC

thegrimmest wrote: post #17

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

I agree with the premise, but the problem is that it gets ethically, uh 'interesting', if you replace 'tall' with say, 'black', in your argument.

Re: IMF researchers: digital footprint yields better credit assessment

#22

Post by [deleted] » Fri, Feb 12, 2021, 11:57 PM UTC

thegrimmest wrote: post #17

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

[deleted]

Re: IMF researchers: digital footprint yields better credit assessment

#23

Post by dang » Fri, Feb 12, 2021, 11:57 PM UTC

da_big_ghey wrote: post #10

dang wrote: post #9

Earlier quoted context omitted.

Submitted title was "IMF says credit score should incorporate browsing history". That was egregious editorializing. Submitters: please don't do that! Cherry-picking the most sensational detail and making that the title is definitely not ok, and fabricating something the article doesn't say is right out! https://news.ycombinator.com/newsguidelines.html When a title buries the lede in favor of bland corporate rhetoric,…

That wasn't intended to be editorializing or picking a sensational detail. Rather, I found that to be the most relevant point and believed that it would be most salient to HN. I certainly wouldn't call it fabrication; it explicitly states that this data could be used to qualify many people for better credit, doubtless via some credit score system or similar. I think this quote best lays out that position: > Recent re…

Ok, we'll use that latter suggestion above. Thanks!

Re: IMF researchers: digital footprint yields better credit assessment

#24

Post by JohnJamesRambo » Fri, Feb 12, 2021, 11:59 PM UTC

naurupatel wrote: post #3

Truly a dystopian world we are entering. Now more than ever is the time for funding and developing alternative tools that utilize decentralization. What's coming cannot be stopped but it can be broken.

It is already in motion, cryptocurrency will accept you no matter what your credit score or browsing history is.

“The computer can be used as a tool to liberate and protect people, rather than to control them.”

-Hal Finney

Re: IMF researchers: digital footprint yields better credit assessment

#25

Post by pmichaud » Sat, Feb 13, 2021, 12:00 AM UTC

thegrimmest wrote: post #17

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

When I have this conversation with myself, here's what I come up with:

Shouldn't we be allowed to everything into account when determining credit worthiness? Even if it's socially uncomfortable?

We get locally more accurate pricing / risk assessment that way, but we also create feedback loops that we as a society have decided we want to not contribute to. The cost for this is the pricing inaccuracy which we collectively eat.

So, I don't think you're wrong, but maybe consider if what we're socializing the cost of is worth the price?

Re: IMF researchers: digital footprint yields better credit assessment

#26

Post by slg » Sat, Feb 13, 2021, 12:01 AM UTC

I'm not a fan of the traditional credit reporting system. It is often a black box that makes it difficult to understand how the actual credit scoring algorithm works. Although one of the important aspects of the current system is that all the inputs are known. We don't know exactly to what degree each input matters, but we know the inputs. A new system needs to keep that aspect or else is going to cause pain for a lot of people who are financially punished without being aware of why. This type of transparency is also important for fairness. As other commenters have mentioned, some traits like race would be a good indicator of credit worthiness due to a variety of systemic socioeconomic issues. However that is generally considered unfair and is illegal to take that into consideration.

Re: IMF researchers: digital footprint yields better credit assessment

#27

Post by insert_coin » Sat, Feb 13, 2021, 12:02 AM UTC

thereisnospork wrote: post #21

thegrimmest wrote: post #17

Earlier quoted context omitted.

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

I agree with the premise, but the problem is that it gets ethically, uh 'interesting', if you replace 'tall' with say, 'black', in your argument.

I think it gets to the point.

If blacks are for some reason (and I am not saying they are I do not know) less likely to pay back loans, then that is the problem that needs addressing. It might be a little painful to admit the huge racial divide but it is real and that is a problem we need to solve, taking the easy way out lying to ourselves only harms society in the long run and destroys the lives of people who cannot pay back the loans and end up in a huge debt cycle very difficult to get out of.

Re: IMF researchers: digital footprint yields better credit assessment

#28

Post by drtillberg » Sat, Feb 13, 2021, 12:03 AM UTC

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

This. Slippery slope to denying credit based on a consumer's decision to avoid using Facebook or to search using DuckDuckGo.

Re: IMF researchers: digital footprint yields better credit assessment

#29

Post by austhrow743 » Sat, Feb 13, 2021, 12:05 AM UTC

thegrimmest wrote: post #17

hn_throwaway_99 wrote: post #15

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

Yes, we are just socialising the cost of different races, sexes, ages, etc being different.

Many people like that.

Re: IMF researchers: digital footprint yields better credit assessment

#30

Post by hammock » Sat, Feb 13, 2021, 12:06 AM UTC

insert_coin wrote: post #27

thereisnospork wrote: post #21

Earlier quoted context omitted.

I agree with the premise, but the problem is that it gets ethically, uh 'interesting', if you replace 'tall' with say, 'black', in your argument.

I think it gets to the point. If blacks are for some reason (and I am not saying they are I do not know) less likely to pay back loans, then that is the problem that needs addressing. It might be a little painful to admit the huge racial divide but it is real and that is a problem we need to solve, taking the easy way out lying to ourselves only harms society in the long run and destroys the lives of people who canno…

So should we use the algorithms to charge different races different interest rates? Or should we not use them. And address the problems you mention? Because in the previous comment it sounded like they wanted to use them with applause.