4 ms·

"The fund does away with a focus on FICO scores, helps prep companies ahead of receiving a loan, and provides ongoing support." So they've rediscovered "knowin

"The fund does away with a focus on FICO scores, helps prep companies ahead of receiving a loan, and provides ongoing support." So they've rediscovered "knowing and helping your customers", instead of just seeing them as a number spit out by a computer. Awesome!

thomas_howland 9y ago
I would be extremely annoyed if my mortgage or credit card company actually tried to foist some advise on me.
- kashkhan 9y ago
  this is silicon valley. Every investor you meet tries to give you advice on how to run your company and live your life, even if 99% aren't going to invest in you.
  - godzillabrennus 9y ago
    I don't think that's limited to SV. Investors/advisors with free advice are abundant. Just remember it's worth what you paid for it 99% of the time.
- diggernet 9y ago
  I understand the sentiment. But if you had a low score due to poor financial management, you'd be better off getting some education with your loan than not getting a loan at all. That said, these are small business loans, which is an area where advise would presumably be a lot more welcome than on a mortgage.
rmason 9y ago
They're reinventing community banking. In small towns the bankers knew you, knew your family and made judgments on character and less on credit score. Kids were borrowing for 4H animals, buying their first car, planting a field using dad's tools and paying those loans back promptly. All of that has gone away, but is being rediscovered.
- dx034 9y ago
  Community banking is important but cannot replace how modern banks work. Loan volumes are usually small as you cannot give a loan of several million dollars just because you think the other person is trustworthy. Also, this system works for people who stay in their hometown but can make it hard for newcomers to get credit. If you're new in town and your neighbours don't like you it doesn't mean you should be denied credit. FICO scores are far from perfect but it's the best system banks could come up with so far. All large banks are in the business to make money. If someone comes with better risk measures that can increase lending and keep risk low, they'd happily adapt it. The big problem with replacing FICO is that new methods based on machine learning often exhibit some form of racial bias which can cause huge fines by the CFPB. So banks try to avoid any new techniques until they can be certain that the system doesn't bias towards certain groups.

thomas_howland 9y ago

I would be extremely annoyed if my mortgage or credit card company actually tried to foist some advise on me.

kashkhan 9y ago
this is silicon valley. Every investor you meet tries to give you advice on how to run your company and live your life, even if 99% aren't going to invest in you.
- godzillabrennus 9y ago
  I don't think that's limited to SV. Investors/advisors with free advice are abundant. Just remember it's worth what you paid for it 99% of the time.
diggernet 9y ago
I understand the sentiment. But if you had a low score due to poor financial management, you'd be better off getting some education with your loan than not getting a loan at all. That said, these are small business loans, which is an area where advise would presumably be a lot more welcome than on a mortgage.

rmason 9y ago

They're reinventing community banking. In small towns the bankers knew you, knew your family and made judgments on character and less on credit score. Kids were borrowing for 4H animals, buying their first car, planting a field using dad's tools and paying those loans back promptly. All of that has gone away, but is being rediscovered.

dx034 9y ago
Community banking is important but cannot replace how modern banks work. Loan volumes are usually small as you cannot give a loan of several million dollars just because you think the other person is trustworthy. Also, this system works for people who stay in their hometown but can make it hard for newcomers to get credit. If you're new in town and your neighbours don't like you it doesn't mean you should be denied credit. FICO scores are far from perfect but it's the best system banks could come up with so far. All large banks are in the business to make money. If someone comes with better risk measures that can increase lending and keep risk low, they'd happily adapt it. The big problem with replacing FICO is that new methods based on machine learning often exhibit some form of racial bias which can cause huge fines by the CFPB. So banks try to avoid any new techniques until they can be certain that the system doesn't bias towards certain groups.