Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

axios.com

Post reply on HN
Print view View original

351–360 of 690 posts

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

#351

Post by tristor »

potato3732842 wrote: post #190
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'm really sick of this sort of look down your nose at a huge fraction of consumers type behavior. It's the same sort of stupidity that underpins the famous "surely everyone else is wrong" behavior that is exemplified by principal skinner[1]. I eat garbage by the standards of anyone who gives a crap about food and you don't see me going around looking down on everyone for wasting resources on fancy food ingredients a…

> shitposted from my 8yo phone while driving my $500 car through traffic on bald tires

I mostly agree with you, but some of those "needless" expenditures have negative externalities when avoided. Whether that's processed foods causing heart disease and diabetes that strain public health resources, or your bald tires greatly increasing the likelihood of an automobile accident that could kill you or someone else. Your response takes an opposite extreme that none of this matters, when in fact much of it matters, but it's not like treating it like it matters makes you a better person. We need to eliminate moral value judgements from the equation, while still being reasonable.

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

#352

Post by thomascountz »

tqi wrote: post #341
thomascountz wrote: post #327

I left the U.S. several years ago and have completely forgotten about "credit scores" in this sense. I get reminded every once-in-a-while how things that used to feel so obvious and inevitable and necessary for society to function are completely artificial.

What's the process of vetting people for loans in your current country?

You can have debts totally only up to a certain percentage of your income. Banks require that you produce a monthly budget demonstrating that you have a certain amount left per month after all expenses and debts are paid. You have to be able to prove this by giving them access to your tax and financial records. Most rates for things like homes and cars are consistent from bank to bank across the country.

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

#353

Post by 9rx »

devmor wrote: post #255
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.

Or you end up with the opposite end of the problem. I grew up in destitute poverty and was told all my childhood that credit was an evil trap - I should absolutely never use it. Well, spring forward to me starting a pretty good career as a software developer and wanting to get my first reliable car. I had no credit history and ended up with a 19% APR. That really, really sucked. It's been 10 years since then and I st…

> I still get dinged for not having "enough" credit history

Maybe the data is wrong? I took out a few loans over the years with strange comments from the lenders like "You don't have much credit history", but since it didn't impact anything I didn't think much of it. Somewhere down the line a lender was like "I don't think this is you". Turns out that it wasn't.

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

#354

Post by potato3732842 »

bryanlarsen wrote: post #309
ljm wrote: post #294

Earlier quoted context omitted.

Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. I imagine minimum wage would be 25-30 bucks an hour if it did track inflation and that would only serve to keep your purchasing power constant. Credit, in this sense, is also used to solve a cash flow problem. It’s a bad sign when that credit (or Klarna Pay-in-3 style setups) is appli…

That's not true. Wages have generally outpaced inflation as long as we've measured inflation properly. Up until the early 1970s this was very palpable, since the early 1970s the delta has been much lower, wage increases have been very slightly above inflation. Why does it feel different? 1: the amount of stuff we buy has increased a lot . Anybody who owns what would be considered solidly middle class in the early 197…

And in the 1870s the average middle class family wouldn't have owned nearly the same variety of finished wood and metal products. Industrialization changed that.

You can't just say "but iphones" to hand wave away huge changes in the big items of a family's budget.

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

#355

Post by AntonPhibes »

conradev wrote: post #315
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"

I find meaning in understanding ever so slightly more about the world we live in, and so I love consuming as many things and experiences as possible to have a rich understanding of myself and to some extent, humanity as a whole. I don't like the word "consume" though. Am I consuming a surfboard or am I surfing? am I consuming a song, or am I listening to it? singing along to it? This perspective feels tired. The enti…

[dead]

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

#356

Post by barchar »

Tadpole9181 wrote: post #75
SoftTalker wrote: post #69

Earlier quoted context omitted.

For most of them, interest accrues from the date of purchased but is not charged if you pay on time. If you don’t, you owe all the back interest from day one.

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?

Beats the pants off a payday loan.

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

#357

Post by jmcqk6 »

lisper wrote: post #338
thomascountz wrote: post #327

I left the U.S. several years ago and have completely forgotten about "credit scores" in this sense. I get reminded every once-in-a-while how things that used to feel so obvious and inevitable and necessary for society to function are completely artificial.

Society itself is completely artificial. Money, property rights, laws, taxes, even the words I'm using to write this very comment... all of these are just human inventions, reified mythology.

It's useful to remember this when tempted to make arguments that assume there is a Right Way to do things. We are exploring a massive possibility space where components interact in non-linear ways. There isn't a right way, there is no golden path. The reality of our society is an integration of each individual experience. We build theories as abstractions of that integration in order to manage and engage with that massive complexity. It can be useful, as long as we remember that they are abstractions. When we forget that our abstractions are only abstractions, we tend to cause additional problems on top of that which we were already trying to engage.

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

#358

Post by eric_the_read »

suddenlybananas wrote: post #194
potato3732842 wrote: post #190

Earlier quoted context omitted.

I'm really sick of this sort of look down your nose at a huge fraction of consumers type behavior. It's the same sort of stupidity that underpins the famous "surely everyone else is wrong" behavior that is exemplified by principal skinner[1]. I eat garbage by the standards of anyone who gives a crap about food and you don't see me going around looking down on everyone for wasting resources on fancy food ingredients a…

Le Creuset pots are genuinely great though

Absolutely! But they're not, IME, 6x as great as a $50 Lodge dutch oven. They don't solve a categorically different problem or solve the same problem in an innovative new way. They're just really nicely made, is all.

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

#359

Post by dsign »

LeafItAlone wrote: post #350
thomascountz wrote: post #327

I left the U.S. several years ago and have completely forgotten about "credit scores" in this sense. I get reminded every once-in-a-while how things that used to feel so obvious and inevitable and necessary for society to function are completely artificial.

Where are you now? And what is the system like there? From my extremely naive understanding, obtaining credit and low rates is, in general, much easier in the US than other places. So it makes sense to me that it has “artificial” tools to help determine risk. How do other countries handle this and provide the availability that can be found in the US?

Can't speak for every country, but in Sweden for example tax data to a certain level of detail (income by labor, income by capital) is publicly available for each citizen. Same for debts. And debts that go to the collection authority, which has a very dark name (kronofogden), are very public and somewhat worse than having to wear a scarlet letter. So credit institutes have enough of an idea of your finances to decide your rate.

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

#360

Post by nradov »

thomascountz wrote: post #352
tqi wrote: post #341

Earlier quoted context omitted.

What's the process of vetting people for loans in your current country?

You can have debts totally only up to a certain percentage of your income. Banks require that you produce a monthly budget demonstrating that you have a certain amount left per month after all expenses and debts are paid. You have to be able to prove this by giving them access to your tax and financial records. Most rates for things like homes and cars are consistent from bank to bank across the country.

And how do lenders assess previous defaults when underwriting new loans?

From what I've seen, most developed countries actually do have the equivalent of the US credit reporting agencies. It's just that the functionality goes by different names and is distributed across several different types of entities rather than being centralized in three credit reporting agencies (plus Fair Isaac Corporation / FICO which is a vendor to all of them).

For better or worse, it's not really possible to have a modern economy with high growth rates unless lenders have a reasonably reliable way of quantifying borrower propensity to pay. Debt to income ratio is a piece of that, but some people are just deadbeats.

Post reply on HN