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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

#661

Post by datavirtue »

mrguyorama wrote: post #495
Whoppertime wrote: post #490

Earlier quoted context omitted.

https://www.cato.org/blog/new-k-12-productivity-chart It's hard to believe that education is getting less funding. There seems to be a perception that spending more money on education will result in smarter students or higher test scores but that doesn't seem to be the case. Obviously if you spend $0 on education results will suffer, but there's a point of diminishing returns where $1 more in spending doesn't seem to…

How much we spend on school systems is not a meaningful indicator of how much we spend on education . American teacher income has barely tracked inflation over the past 30 years, and it sure as shit didn't start high in the 90s. Teachers still have to buy their own supplies, still rely on old material, and still basically can't afford to live. Gee, why is it so hard to get good teachers into the American school syste…

That's part of the system, grovelling powerless teachers that will roll that shit downhill.

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

#662

Post by danans »

9rx wrote: post #628
danans wrote: post #622

Earlier quoted context omitted.

> The discussion seeks to understand what that balance is. In the suburbs people generally seek more space, privacy, and security, while still having relatively easy access to opportunities. It sounds like you (like me) have found our personal balance elsewhere.

> while still having relatively easy access to opportunities. Trouble is that this discussion stems from comments about how those in the suburbs can't afford the cost of transportation. Is there really opportunity if you can't afford it? Other thread branches seem to agree that those comments were made up bullshit, so that adds complexity, but we aren't really serving the intent of the discussion if we deviate from t…

> Is there really opportunity if you can't afford it?

If your argument is that a suburban lifestyle of convenient access to opportunity is not universally affordable given the current configuration of American society, then I'd be in complete agreement.

Question is what to do about that, if anything.

My preference is to densify the suburbs, allow mixed use development, and add better transit links.

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

#663

Post by loeg »

quickthrowman wrote: post #608
loeg wrote: post #581

Earlier quoted context omitted.

Maybe you replied in the wrong place? This isn't responsive to my comment.

No, I was replying to your comment. Using a BNPL loan is less optimal than paying with a credit card due to the cash back rewards. People with good credit may use them, but it makes zero sense to do so. You always come out ahead by using a credit card and paying it off immediately unless the high yield savings rate is 6% or higher assuming a BNPL loan term of 3 months. Beyond that, it does make sense to use them, lik…

I don't think a discussion of optimality is relevant to what I wrote.

Lots of people with good credit are not maximizing credit card rewards and sign-up bonuses, either. Humans are not homo economicus. (And just as a factual matter, there are sometimes longer BNPL terms than 3 months, which changes the math on what is "optimal.")

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

#664

Post by vdqtp3 »

johnnyanmac wrote: post #449
vdqtp3 wrote: post #426

Earlier quoted context omitted.

In Southern California, surfers were arrested for surfing on an empty beach. Parks were closed. This was hailed as a safety measure. I suspect these sorts of policies are what GP was talking about, rather than vaccines or masking.

You picked two odd examples. A beach is debatable as being capable of being opened and closed, and whether or not a person is tresspassing, but parks are generally managed by the state or country. Of course they can close down. They typically close from subset to sunrise.

I picked two examples of everyday activities that should have been obvious to everyone that they were safe.

Mere weeks later public health authorities encouraged this sort of behavior (going to the beach or the park with ample space between individuals). It seemed a relevant example of "pointless and counterproductive policies around lockdowns"

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

#665

Post by doubled112 »

devmor wrote: post #528
9rx wrote: post #353

Earlier quoted context omitted.

> 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.

What do you mean? Your credit report was someone else’s credit history?

I’ve had entries show up on my credit report that were not mine, but my father’s in another city 750km away. I did not want his bill payment history mixed in with mine. At all.

It was actually more difficult to have them removed than you’d expect. I’m sure it is by design. You could start the process only after signing up for an online account, but the actual request needed to be made via fax.

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

#666

Post by 9rx »

danans wrote: post #662
9rx wrote: post #628

Earlier quoted context omitted.

> while still having relatively easy access to opportunities. Trouble is that this discussion stems from comments about how those in the suburbs can't afford the cost of transportation. Is there really opportunity if you can't afford it? Other thread branches seem to agree that those comments were made up bullshit, so that adds complexity, but we aren't really serving the intent of the discussion if we deviate from t…

> Is there really opportunity if you can't afford it? If your argument is that a suburban lifestyle of convenient access to opportunity is not universally affordable given the current configuration of American society, then I'd be in complete agreement. Question is what to do about that, if anything. My preference is to densify the suburbs, allow mixed use development, and add better transit links.

> My preference is to densify the suburbs, allow mixed use development

But then you're right back to it being regular city — exactly what the people in the suburbs (supposedly) want to avoid when they choose to live in the suburbs.

This is the conundrum that prompted the discussion. The cost of transportation is said to be too high, but at the same time it is said that it is important to preserve the qualities of the suburbs that necessitates those high transportation costs.

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

#667

Post by 9rx »

bluefirebrand wrote: post #660
9rx wrote: post #624

Earlier quoted context omitted.

> but ultimately if everyone is using the same roads then you will eventually sit in the same traffic if you're trying to get to the same places? Once you get to the arterial roads that take the traffic to the amenities that's true, but it is often slow going just to get that far. Fair to say that is less true if you are on the edge of the suburbs, but, for the sake of this discussion, are you really living in the su…

> now when you can fully shape the experience into being what you want it to be Sort of my whole point is that there is no situation in life that we can "fully" shape into what we want, every situation comes with upsides and downsides which are often not really in our control, because we have to share space with other people I grew into an adult and commuted to my local college from the countryside. I didn't live out…

> Sort of my whole point is that there is no situation in life that we can "fully" shape into what we want

I am not sure I intended for you to take it that literally, but to the extent that you can fully shape it within the constraints of reality. For example, it is abundantly clear that countrysides are not all equal. Even on the surface, countryside can vary from farmland, mountains, lakes, forests, etc. which each enable completely different lifestyles. Going deeper, the social experience can vary wildly from one countryside to the next. You get the idea. There are some countrysides I'd have no qualms about living in, and others I wouldn't even want to vacation in, let alone live there (even while others quite happily live there). That choice is something within your control.

> I grew into an adult and commuted to my local college from the countryside.

I assume this means that you carried on your stay still living with the same family? If so, I'm not sure that changes the calculus. It is not like something magical happens when you turn 20. The significance of being a teenager earlier was only in that it implied that you were following your parents around. If you continued that into your 20s, 30s, 40s, hell if you are 80 and living in a place of someone else's choosing rather your choosing then I'd say the same applies.

Let me ask this: If you, for some reason, were forced to move to the countryside today, are you choosing to move to the exact place your family chose all those years ago or are you going elsewhere? Assuming you give it some thought, my expectation is latter. The world is a pretty big place. The statistical likelihood that the place you ended up in as a teenager with presumably little to no input also being the best option you can independently find among all of the different countrysides is low.

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

#668

Post by matthewdgreen »

Retric wrote: post #544
matthewdgreen wrote: post #532

Earlier quoted context omitted.

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.

Median home prices aren’t very interesting because most of the increase is limited to specific competitive areas, and median US home prices hides that effect. I’m sure houses in deeply rural areas haven’t gotten much more expensive, but it isn’t relevant to me.

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

#669

Post by Esophagus4 »

SirMaster wrote: post #260
bitmasher9 wrote: post #236

Earlier quoted context omitted.

Personally borrow and invest over shorter periods of time (less than 10 years) has too high of a risk portfolio for me, especially with a depreciating asset. What if there is a market downturn, and you’re out not only the decrease in value of your assets but also the interest in your loan. I admit this is down to personal preference and risk tolerance.

Well if you can't survive a downturn and the risk then no you shouldn't do it. But if you can then you should and in the long run you will end up ahead.

While that is fine in the abstract:

Current 5 year CD APYs are 4.2-4.7%, while current new car auto loan APRs are 5.2-6.7%.

There is usually no magic spread to be captured unless you’re willing to take more risk (say, money in equities instead of CDs). Financing a depreciating asset against one that is volatile in the short term (and has seen drawdowns of 20% several times in the last 10 years) is a duration to risk mismatch.

That spread capture argument often is just justification for a bad decision - people don’t in practice use credit as liquidity backed by an investment, they use it as a cash advance to buy more car than they would absent financing.

So now instead of buying a $20k car cash, people will buy a $40k car, increasing their debt load against a depreciating asset.

In general, my theory is… if that small spread from borrowing to buy a depreciating asset makes a significant difference to you financially, you can’t afford that car anyway, and you’re better off buying cheaper.

Sorry to unload a bit… that wasn’t about you, that was about me being triggered by seeing this advice a lot :)

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

#670

Post by eadmund »

Esophagus4 wrote: post #669
SirMaster wrote: post #260

Earlier quoted context omitted.

Well if you can't survive a downturn and the risk then no you shouldn't do it. But if you can then you should and in the long run you will end up ahead.

While that is fine in the abstract: Current 5 year CD APYs are 4.2-4.7%, while current new car auto loan APRs are 5.2-6.7%. There is usually no magic spread to be captured unless you’re willing to take more risk (say, money in equities instead of CDs). Financing a depreciating asset against one that is volatile in the short term (and has seen drawdowns of 20% several times in the last 10 years) is a duration to risk…

> There is usually no magic spread to be captured unless you’re willing to take more risk (say, money in equities instead of CDs).

Which is what one should do, provided one believes that the long-term result will be positive.

> Financing a depreciating asset against one that is volatile in the short term (and has seen drawdowns of 20% several times in the last 10 years) is a duration to risk mismatch.

Financing an asset and the value of an asset are independent. If one believes that one will get a better yield by investing than one could by avoiding financing, then one should finance. I believe that over time my investment returns will be higher than the current car loan rate.

> people don’t in practice use credit as liquidity backed by an investment, they use it as a cash advance to buy more car than they would absent financing … So now instead of buying a $20k car cash, people will buy a $40k car, increasing their debt load against a depreciating asset.

Yes, fools are foolish. A wise man makes educated predictions of the future. If his current total portfolio debt load can support financing a purchase, and if the rate to finance it is less than what he predicts his yield will be, then he’ll finance it.

> if that small spread from borrowing to buy a depreciating asset makes a significant difference to you

Hey, an extra 1% a year for the duration of one’s working life adds up quite significantly! The key is to carefully manage one’s expenses and balance sheet, maintaining a healthy debt ratio, only incurring debt when it makes sense, and refinancing or paying it down when that makes sense.

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