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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

#541

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…

25 years ago, I sold my previous house. It recently sold for 4x what I sold it for, a 300% ROI. Was selling it a financial mistake?

Consider that I didn't pay property taxes, insurance, maintenance, and squatter eviction costs for the last 25 years.

Consider that the S&P500 went up 561%.

Buying a house is not a good wealth builder strategy.

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

#542

Post by tristor »

stephenbez wrote: post #500
tristor wrote: post #348

Earlier quoted context omitted.

> Of those who carry credit cards in the US, 60% of them carry a balance [0]. Carrying a balance is not automatically the worst choice. I have a massively positive net worth (for a working stiff), so could effectively have $0 debt at any point in time, inclusive of my mortgage, but all debt is not equal, nor are all investments. Credit card debt is clearly one of the worst forms of debt with the harshest interest rat…

Another option is to do margin borrowing on some investment assets that you have. Because it is a secured loan the interest rates are much cheaper than credit cards. Schwab has a good set up, it can be configured to automatically do a loan if you withdraw more funds from your checking account than you have. They currently charge about 12% but there are other options around 6%. My friend used this set up for his emerg…

Yes, borrowing on margin is a really good strategy, although it depends on your broker how that functions. I've had a good experience using this for smaller amounts, but given market volatility I'm concerned about borrowing this large of a sum on margin, as I don't know what clown stuff is going to happen in the next 6 months, a credit card feels lower risk to me, although the interest rate is higher. I actually considered this, using a credit card will cost me $530 in additional interest over taking margin, but has lower risks in my estimation. That $530 is not enough for me to feel it's worth it to do it via a margin loan.

That said, margin is really useful as a tool because it lets you unlock the value of your investments without tax penalties in lower volatility markets.

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

#543

Post by chasd00 »

vel0city wrote: post #507
9rx wrote: post #497

Earlier quoted context omitted.

> Jobs You haven't gained that, though. Not without travel, and once travel is in the picture then you can be located anywhere. Like was said in other comments, in practice, the time to get to a point in the city is the same if you start in the city, or if you start outside of the city. Cities build up as hubs for the surrounding area and the world at large, so getting things in and out of the city really fast is cor…

> Like was said in other comments, in practice, the time to get to a point in the city is the same if you start in the city, or if you start outside of the city This is objectively, radically untrue. It takes my wife 10-15 minutes to get to that same office where it takes the people living in Forney an hour to get in. She'll spend 20 minutes of her day commuting, they'll spend two hours . I used to ride my bicycle to…

Many people who live in those towns you describe work in McKinney, Plano and other parts of the suburbs. I’m not saying you’re wrong because there certainly are those people that make those commutes. I personally know a dev who lives in Prosper and another who lives in Melissa and they both commute to Las Colinas! Their reasoning was home affordability, home value growth, and school quality.

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

#544

Post by Retric »

matthewdgreen wrote: post #532
Retric wrote: post #188

Earlier quoted context omitted.

Mortgage loans have been getting cheaper due to automation and the commoditization of loans / increase in surplus capital. That then pushes up home prices over time relative to inflation.

Home prices have doubled in most areas since 2009 (and worse in many areas.) when people complain about prices in 2025, this is what they’re talking about. This is not driven by the novel existence of 30-year mortgages and interest rates are at a near-term high.

Half of that is inflation. Most of what remains is the anomaly in housing prices in 2009 https://fred.stlouisfed.org/series/MSPUS

Inflation adjusted median US home prices Q4 2024 where 419,300 vs Q4 2006 ~382,00 that isn’t flat but the difference is far less interesting.

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

#545

Post by chasd00 »

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…

Can’t argue with the math but one thing about a mortgage is it takes no effort. Just pay the bill and time does the rest. With stock investment there’s an emotional attachment to every major swing, should you buy or should you sell is never far from your thoughts. Using a home as an investment may not make the most return but it’s easy as long as you can pay the bill.

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

#546

Post by 9rx »

danans wrote: post #539
9rx wrote: post #474

Earlier quoted context omitted.

> They want conveniences of the city/metropolis (access to jobs, entertainment, and education) But not without having to travel. And once travel is in the picture, you can be to the same places just as fast from a farm as you can from another point in the city. It might be hard to appreciate if you have never lived on a farm, but once you do you'll realize that the highway is unbelievably efficient. Your point only h…

> But not without having to travel. And once travel is in the picture, you can be to the same places just as fast from a farm as you can from another point in the city. Your phrase "having to travel" is painting with a very broad brush. There are naturally huge variations in transit time depending on where you live in a metropolis, where you are going, and how you are getting there. I can walk 15 minutes to a coffee…

> I can walk 15 minutes to a coffee shop and grocery store

Not to make it sound like a competition, but I can do it in 5 not living in a city. Why does it take so long in a place that should be optimized for keeping everything close by?

> drive 20 minutes to a Walmart

I can be to two different Walmarts given 20 minutes. That is also an unusually long time for a heavily populated area. Are you actually living in a rural area with a train and I misunderstood?

> and take a train 35 minutes to the office.

Okay. You got me there. I don't have a train in my backyard. It would take me 20 minutes to get to the station.

But, to be fair, when I lived in a big city downtown it also took me 20 minutes to get to the station, so perhaps your situation of having a train sitting right outside your door waiting on you is a bit unusual?

That said, perhaps you have included, say, 20 minutes to get to the station, and a few minutes waiting on the train. But in that case is the 5-10 minutes of actual train time really that advantageous? In this scenario you're almost at your destination before you even get on the train. Presumably this isn't what you meant.

> you have to want to manage that kind of business.

You'd have to report your income to the government. What else is there?

The onus will be on the farmer working the land to do everything else. I know that well, because I'm one of those farmers. The industry is much too competitive to think you can make the landowner do anything.

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

#547

Post by RiverCrochet »

msgodel wrote: post #140
hnbad wrote: post #103

Earlier quoted context omitted.

Whatever you put aside is not going to be enough to prevent complete financial ruin if shit hits the fan. You might be able to cover smaller emergencies like an appliance breaking or your car needing repairs but literally just giving birth or being in an accident can bankrupt you in the US. I'm not at all surprised low to medium income Americans would just give up and accept their inevitable financial ruin instead of…

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.

This is now happening.

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

#548

Post by vel0city »

jimbokun wrote: post #537
vel0city wrote: post #420

Earlier quoted context omitted.

> 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. I think it's a large and growing cultural divide. There is a growing class of predominantly progressive people who look to walkability scores and the variety of ethnic restaurants and music venues to evaluate the desirability of a place to live. And an older more conservative cohort who value what you describe.

I agree there's a growing divide there, and even a decent middle ground there of people who value maybe having a yard but want a park and shops and what not within bicycle distance and not be entirely car dependent.

I'm not entirely sure it's fully an age divide. Definitely age-weighted, I can agree. Other than family that grew up in NYC, most of my family >50 thinks I'm crazy for taking my kids on public transit and can't understand why I'd like to live closer in the city with kids compared to living in the sticks on a large property and a 15 minute drive to the grocery store. But there's also a lot of conservative younger-ish (millennial and younger) people who also seem to have that same mindset of wanting to live further out of the city and don't care or are against things like transit and tax dollars spent on city parks and bike lanes.

That example of the family of four where a four bedroom house is just too cramped for their needs I gave elsewhere? They're barely 30. They're absolutely not alone in what they're looking for.

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

#549

Post by ProllyInfamous »

pests wrote: post #535
ProllyInfamous wrote: post #383

Earlier quoted context omitted.

>using DoorDash ... is a luxury ripoff I live in a working-class neighborhood and it blows my mind how often DoorDash visits my neighbors (particularly considering there are dozens of restaurants within one mile). The only time I encourage delivery service is when we're too intoxicated to drive.

I stayed with distant family for a bit around COVID when everyone was WFH. Him and his wife must have gotten 3-5 DoorDash deliveries a day pretty reliably, I was blown away. Each ordering their own thing from different restaurants. Random “I want a donut from 711 at 1am” where I’m sure fees/tip were multiples of the actual food cost. Sometimes the different drivers would arrive at the same time and we’d have a little…

When COVID started my wealthiest elders decided to start eating out for every meal in order "to support local businesses." Ironically, they did not leave any tips because "you don't tip unless you sit down in the restaurant." You're not helping in the way you think you are, Gramps.

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

#550

Post by chasd00 »

allenrb wrote: post #227
scarface_74 wrote: post #60

Earlier quoted context omitted.

Well seeing that you need a car to go to work to have money to invest in the first place… And before you say “buy an old beater”, then you have to contend with an unreliable car that may cause you to be late to work and get fired. It’s also much easier and cheaper to get a car loan for a newish car than to borrow money to fix a car.

As a young person, I was in the “own an old beater” category for many years. That said, I knew how to maintain and repair most of what could go wrong. That stick shift 1995 Accord had over 300,000 miles when a school bus finally totaled it while parked. But for most people, maybe not the right answer. There’s a middle ground. There are some very affordable vehicles out there with good warranties. Buy one and for a fe…

I don’t think you need to know a lot about cars to get good value out of them. I had an old ford ranger and all I did was get new tires when they tread wore off, get new brake pads when they started squeaking, and get the oil changed when the little sticker said to. I put 350k miles on that truck.
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