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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

#431

Post by BenjiWiebe »

kiba wrote: post #324
jvanderbot wrote: post #320

Earlier quoted context omitted.

Credit cards however, can be used to get free stuff from rewards. Credit loans or payment plans can also be used to get a higher credit score, making the first item easier. Conversely to your example of credit making cash, Cash can make you money through investing, so Credit can also be used to keep higher amounts of cash on hand when purchases are made. , e.g., buying a car on credit and using the car money to inves…

Credit card rewards are just discounts, discounts that are charged to the merchant. It's not a free lunch by any means.

And as a merchant, yes it's annoying, but it's also nice when a customer pays with a credit card, because we actually get paid then.

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

#432

Post by 9rx »

vel0city wrote: post #420
9rx wrote: post #377

Earlier quoted context omitted.

Yes, but why would anyone want to live on what is effectively a farm, but without the benefit of separation from other people or land (read: income) that a farm offers? That completely defies the whole reason for the density. I'm not saying it doesn't exist, I question why people are doing it.

> The whole reason for accepting being squeezed in tightly with other people That's the thing, a lot of Americans really don't like this idea of being squeezed in tightly. People really don't like having a shared wall. And it's not that people like these tightly squeezed lot lines, they'd prefer 1 acre lots. These tiny lots are all they can afford while still being somewhat acceptable to them about commutes. Which Am…

> That's the thing, a lot of Americans really don't like this idea of being squeezed in tightly.

Sure, it isn't coincidence that the "American Dream" has always been portrayed the sizeable house on a large acreage out in the country surrounded by white picket fences. But we're talking about the people who are choosing to cram in beside one another, but aren't bringing the services and joy that such density normally offers to go along with it.

> These tiny lots are all they can afford while still being somewhat acceptable to them about commutes.

I've lived in cities and on farms and the commute times end up being about the same if you ever have to leave your immediate community that is within walking distance. You have to drive further from the farm, sure, but the highway is surprisingly efficient. Is there some reason people are more concerned about distance than time?

The city offers a clear advantage when you are travelling short enough distances that you can walk. But, that brings us right back to wondering what you need costly transportation for? The two dangly things beneath you are right there! (Yes, I know, some people hazve disabilities, but the discussion isn't about them)

> But people act like these zoning laws just come about on their own.

Not at all. That's why we question why people are doing it. It is clearly their own choice. But why when we then hear them crying that the transportation costs are too high?

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

#433

Post by dgfitz »

forrestthewoods wrote: post #102
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 I’m pretty sure the median American does NOT carry a monthly CC balance. They pay it off in full every month. But it’s very close to 50%. And may swing one side or the other depending on how fubar the economy is at that moment in time. So what you said is true for roughly half of Americans. But not true at all for the other ~half. I think.

I looked it up, and most of the sources seem sketchy (quora, lendingtree), but they agree with your number.

I think the kicker is, the ~50% of people who don't pay them off in full every month can have a massive amount of CC debt and struggle to even make a dent in it.

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

#434

Post by kadushka »

olyjohn wrote: post #400
nradov wrote: post #261

Earlier quoted context omitted.

Your kids will create hidden social media accounts that you don't know about. That's what I would have done in their situation.

Their exposure will still be much less than someone who gives them free reign and lets them sit in the livingroom staring at a phone. They won't be staring at the phone distracted while they're hanging out with the family.

Hiding things from parents is a far bigger problem than staring at a phone in a living room.

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

#435

Post by WalterBright »

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…

> It will cost you 35k a year

> If instead you rent it for 20k a year

Some good numbers, but what is missing is the result of investing $35k-$20k=$15k per year. Let's say you earn a %7 real return on $15k/year invested for 60-25=35 years.

Writing a little program:

    import core.stdc.stdio;
    void main() {
        double d = 0;
        foreach (i; 0..35)
            d = (d+15000)*1.07;
        printf("d: $%f\n", d);
    }
Yields $2,218,701

I would think twice about buying real estate as an investment.

Personally, I own my home because I want to use it as I see fit, but I recognize that as an investment it's a lousy one.

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

#436

Post by WalterBright »

maerF0x0 wrote: post #401
ta1243 wrote: post #239

Earlier quoted context omitted.

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…

> people won't rent places out if they aren't covering their mortgage btw this is usually false, and mostly irrational. 1. Realize that every landlord has a different capitalization structure. Many likely bought decades ago and thus only owe a fraction of what the current market selling price is. Additionally we also have had a long period of ultra low interest rates so their interest rate is different than what new…

> and mostly irrational

I'd say it is quite rational. Real estate represents value, and value should be earning at all times. Owning it free and clear does not change that one iota. Rents are based on the value of the property, not the mortgage on it.

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

#437

Post by ndileas »

BobaFloutist wrote: post #330
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…

I do wonder if there's hidden benefits to using Klarna to get, like, bulk discounts. Buy three months of toilet paper/chicken broth at once at Costco, pay it off over three months, save a few bucks each time.

You don't need klarna for this. Credit cards already fill this need, and with careful use are free. Most people (in my circles) already do this type of thing

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

#438

Post by ramoz »

veggieroll wrote: post #388

Ok, do rent next. Paying rent doesn't count towards your credit score (at least it didn't a decade ago when I was getting my mortgage). And it's a glaring signal of how the system isn't built for what it claims: evaluating your ability to pay obligations on time. No, the system is built to trap people in poverty and enrich the rentier class.

Have seen this first hand. E.g. tenants with a terrible credit score, but 36mo of proof on-time rent payments. They've always made their future payments (in my experience).

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

#439

Post by WalterBright »

WalterBright wrote: post #435
ta1243 wrote: post #239

Earlier quoted context omitted.

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…

> It will cost you 35k a year > If instead you rent it for 20k a year Some good numbers, but what is missing is the result of investing $35k-$20k=$15k per year. Let's say you earn a %7 real return on $15k/year invested for 60-25=35 years. Writing a little program: import core.stdc.stdio; void main() { double d = 0; foreach (i; 0..35) d = (d+15000)*1.07; printf("d: $%f\n", d); } Yields $2,218,701 I would think twice a…

somehow, I never learned to use a spreadsheet

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

#440

Post by BobaFloutist »

kiba wrote: post #326
bryanlarsen wrote: post #309

Earlier quoted context omitted.

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…

Average American household budgets are dominated by housing, transportation and taxes. Maybe some of that problem is about spending too much money, but it cannot be denied that housing are unaffordable and that transportation is inefficient and is a mess.

Taxes? That can't possibly be right. Average American household pays a small fraction of their income in taxes. Unless they somehow got a huge, expensive house and have the mortgage paid off, I don't see how their income could possibly be dominated by taxes over, say, healthcare, or food.
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