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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

#281

Post by FireBeyond »

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…

There are maintenance requirements to home ownership, absolutely. And some are not cheap.

But there is absolutely a segment on HN who will act like home ownership is nothing more than pulling out a card for the next four digit expense every month or more.

“What are you going to do when (not if) you hot water dies? And then you need a roof? Oops your house needs painting and new appliances and now the AC is gone too, what about pest control, and hopefully your sewer line doesn’t collapse? Can’t handle all that happening to you? Can you realllly afford a house then?”

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

#282

Post by msgodel »

immibis wrote: post #237
msgodel wrote: post #140

Earlier quoted context omitted.

People need to stop moving out of their parent's house if they can't be stable. That's the root cause of a lot of the problems in the US.

And then you have the same people complaining about low birth rates...

Does living independently before you get married make you more or less likely to have kids? That would be an interesting statistic.

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

#283

Post by JKCalhoun »

crazygringo wrote: post #80
Jcampuzano2 wrote: post #51

Earlier quoted context omitted.

If you're using credit to buy a car, most people do so in order to get to and from their place of work for the majority of their driving time. In that way, using credit to buy a car still fits into their theoretical model. For example I know plenty of people who completely got rid of their cars when remote work became more common, or at the very least consolidated to smaller cars or to less cars for a family. Similar…

No. You can rent and you can take the bus. Or rent and buy a crazy cheap old used car. A house and a decent car are not primarily about making money. They're about your quality of life. > And all recommend not using credit cards and instead an emergency fund if you lose your job. And if you already used your emergency fund on, say, a medical emergency...?

Yep, I have never taken a loan out to buy a vehicle — even though I have always needed one to make money.

When I was working a pizza place, going to JuCo, I had a 10-speed bike for transportation. (Yeah, even in the shit Kansas winters, I was riding to JuCo along the just-plowed roads. Now get off my lawn!)

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

#284

Post by potato3732842 »

bonoboTP wrote: post #148
gottorf wrote: post #40

Earlier quoted context omitted.

> They're a tool to be used responsibly. I used to hate to take the position that government should save people from themselves, but I've moderated a lot on it. Some people clearly cannot use credit responsibly.

Societies used to understand this and put lots of limits around exploiting people, such as banning interest rates. But there is no unalloyed good. That ban also blocked rapid economic development as seen in the 19th century, where credit was absolutely critical for railroad construction and other infrastructure like electric or plumbing. It's a real dilemma with tradeoffs, where slogans and soundbites don't work. Hav…

I think the problem is that we left exploitation of people under the umbrella of government open and so all the demand for exploitation has sailed under that flag.

You've got the tire companies lobbying states to up the tread depth for their safety inspections. The HVAC people got refrigerant restricted so that you have to be a license holder to buy it (artificially increasing demand for their service). The plumbing trade groups have a dozen states convinced that you need a license to install a gas dryer, etc, etc.

It's all the same "screw an extra buck out of the public" industry group and cartel behavior we had a century ago, but government just has a seat at the table and gets a cut this time around.

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

#285

Post by JKCalhoun »

DrillShopper wrote: post #244
Libcat99 wrote: post #150

Earlier quoted context omitted.

8 years ago I bought a house. My monthly rent was 1300 and mortgage/escrow/repair savings were instead 2000. Rent went up $100-$200 a year. My son is looking for rentals in our same community and the equivalent rental to what I had is now around $3000. Even ignoring appreciation, in the long term there was a cash flow savings.

> My son is looking for rentals in our same community and the equivalent rental to what I had is now around $3000. Good for you. Bad for your son or anyone living in your community.

Agree. I wonder though if the tone of your comment doesn't come across as casting blame on the person who got the mortgage years ago.

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

#286

Post by tw04 »

tnel77 wrote: post #160
mathgeek wrote: post #97

Earlier quoted context omitted.

You can’t block all of it all of the time, and children (some of the most vulnerable) especially can’t.

True, and this is why you shouldn’t just hand your kid an iPad and peace out. I’m all for technology and video games for my kids, but I’m vigilant to keep my kids’ eyes away from ads. As a result, my kids aren’t foaming at the mouth for the latest and greatest toys and games which was my experience as a child.

Half of the country is teaching their kids to take religion literally and never question it, and that any news story that you don’t like isn’t real, simply because you disagree with it.

Handing over an iPad is the least of the issues facing a large portion of our youth and frankly they might be better off if their parents did sit them in front of it and walk away.

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

#287

Post by barchar »

vintermann wrote: post #110
pjc50 wrote: post #90

Earlier quoted context omitted.

There's also family situations where liquid savings are at risk of being spent by somebody else. I don't think the marshmallow test people factor that in, you'd need to have a third option where the kid waits dutifully for the extra marshmallow but it gets eaten by someone else in the meantime.

Yes. And that doesn't have to be an addict family member or a burglar, it can easily be e.g. a landlord who sees that you have more money, and charges you more money. There are a lot of people in a position to make you give up what you have, if they see that there's money to be squeezed. This is even more true collectively: as an individual, maybe you can get out by being 50% more frugal than the rest. But everyone c…

Everyone can't be 50% more frugal than everyone else, but it's possible for "everyone else" to be something other than 3-4% (the current US savings rate).

The money to sustain a high savings rate without a collapse in wages/demand ultimately comes from the government deficit, or deflation I suppose. This can be sustained even without productive real investment, if people just want savings the money will just sit around or repay debt without bidding anything up in the economy.

> landlord who sees that you have more money, and charges you more money.

You were getting a good deal then. Can happen with "affordable" housing I suppose.

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

#288

Post by danaris »

username332211 wrote: post #124
thrance wrote: post #115

Earlier quoted context omitted.

I'm picturing you in my head as one of those 19th century Englishmen, writing about how being poor is a moral failure and the famine in Ireland is actually a punishment from God and thus nothing should be done about it.

[flagged]

"Agriculture" didn't fail.

The Irish were successfully farming a number of highly nutritious crops. It's just that all of those were taken by the English, under the colonial system of the time.

The potatoes were one of the very few things they were allowed to grow for themselves (and are a great staple crop! near-complete nutrition all in one handy package!). That's why they were left starving when the potato blight hit, not because they were pathetic unenlightened regressives.

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

#289

Post by greedo »

ta1243 wrote: post #239
eadmund wrote: post #125

Earlier quoted context omitted.

A mortgage doesn’t make money, but it (can) enable spending less money. If you buy a place such that interest, maintenance, insurance, taxes and the opportunity cost of not being able to easily relocate are less than rent, then you have saved the difference. It’s also a way to force saving, which is psychologically useful (and thus valuable).

If you buy a house for 500k on a 5% mortgage over 25 years when you are 25, and you plan to live until you are 85, you will live there for 60 years. It will cost you 35k a year for 25 years, or 875k a year After 25 years you have no more expenses. If instead you rent it for 20k a year, increasing with 2% inflation each year, by year 25 you're paying 33k a year in rent, and by year 60 you're paying 66k a year. Over 60…

No more expenses... Right!

No property tax. No homeowner's insurance. No maintenance. Just living on easy street.

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

#290

Post by NewJazz »

drexlspivey wrote: post #113
Tadpole9181 wrote: post #75

Earlier quoted context omitted.

Ah, that's the scam. Yet another poor tax, then? The rich get interest on money they already spent, the poor get an illusion of safety followed by even more destitution?

Ah yes, the big scam of offering zero interest unsecured loans to anyone without even running a credit check. These companies are bound to have big losses when things go south because they literally offer you free money.

They are already having big losses.
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