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Seems like the credit and banking industry is so dependent on the credit bureaus. Is there a way we can have credit cards, loans and mortgages without the need

Seems like the credit and banking industry is so dependent on the credit bureaus. Is there a way we can have credit cards, loans and mortgages without the need of centralizing pii data?

SomeStupidPoint 9y ago
We could have each bank (and so on) store the information you give them and allow requesting people to pull from every agency. That really just creates a lot of little credit bureaus, which fixes the centralization issue at least.
- function_seven 9y ago
  But would that allow me to conveniently omit any negative info from future credit applications? The banks would quickly start sharing this info with one another and become de facto CRAs themselves.
  - gwbas1c 9y ago
    I'm sure blockchain will magically solve that problem! (If you're not laughing then you need to admit you have a problem)
    - tylersmith 9y ago
      I don't understand why they're proposed as a solution to this type of problem at all. I'm a big fan of blockchains, I work for a company/project completely reliant on them, but I don't get where people think they'll be useful for things like credit monitor and health care records. It makes no sense to me.
      - Cerium 9y ago
        Just to play devil's advocate, since I don't think they are a good solution either. Unlike healthcare I think you could use some of the properties of a blockchain to help reduce the risk of leaking personal information during credit checks. For example: you could prove your identity by making a transaction and then show a timely series of past payments.
    - badosu 9y ago
      > If you're not laughing then you need to admit you have a problem) Recognizing the most repeated joke on HN?
- narak 9y ago
  This seems like a legitimate use-case for permissioned ledgers where various lenders have necessarily siloed lending history data but also have an interest in seeing what data everyone else has for prospective lendees. In the longer run, you can imagine not just credit history data being exchanged (with the permission of the borrower perhaps) but also the ability to trade the loan products themselves, most of which is done OTC right now. Fixed income contracts can be described as "smart contracts" [1] [1] https://lexifi.com/files/resources/MLFiPaper.pdf https://lexifi.com/files/resources/MLFiPaper.pdf
  - bastawhiz 9y ago
    That doesn't really fix any security issues, though, it just makes it easier to express who should have permission to access your data. Any system is still vulnerable with, say, a server configured with the credentials admin:admin.
nilved 9y ago
blockchain
- tylersmith 9y ago
  That would mean that instead of the data being in a single centralized location it's on every single node. That's the opposite of what we need. Edit: Assuming the colloquial use of the term "blockchain", a public database. In the sense that a blockchain is simply a data structure it's not necessarily a problem but also not a solution.
  - nilved 9y ago
    No, the idea is that it's under collective control.
    - tylersmith 9y ago
      Why would you as a consumer want collective control over your data? Why should anybody but myself be able to affect my own credit?
      - nilved 9y ago
        That isn't how a blockchain works.
        tylersmith 9y ago
        Great explanation /s Please tell me how a blockchain works then.
        nilved 9y ago
        Ok, sure. Why does having a public ledger imply anybody can control your data? Can I take your Bitcoin? You're being outright stupid tbh.
ams6110 9y ago
Sure, we could all pay interest rates that are based upon some amalgamated average risk profile, so you end up subsidizing deadbeats who don't pay their debts.
- stnaoent23nt 9y ago
  As someone who pays their credit card off in full every month, that would be fine with me. I never pay interest.
  - bigheadpercoli 9y ago
    It's not only about credit cards. Mortgages, car loans, working day loans, etc. as well
- otakucode 9y ago
  Would that be more or less expensive than subsidizing the credit reporting agencies shareholders desire for aggressive growth?
  - ams6110 9y ago
    I don't know. But in the proposed scenario, credit reporting agencies wouldn't exist at all.

Seems like the credit and banking industry is so dependent on the credit bureaus. Is there a way we can have credit cards, loans and mortgages without the need of centralizing pii data?

SomeStupidPoint 9y ago

We could have each bank (and so on) store the information you give them and allow requesting people to pull from every agency. That really just creates a lot of little credit bureaus, which fixes the centralization issue at least.

function_seven 9y ago
But would that allow me to conveniently omit any negative info from future credit applications? The banks would quickly start sharing this info with one another and become de facto CRAs themselves.
- gwbas1c 9y ago
  I'm sure blockchain will magically solve that problem! (If you're not laughing then you need to admit you have a problem)
  - tylersmith 9y ago
    I don't understand why they're proposed as a solution to this type of problem at all. I'm a big fan of blockchains, I work for a company/project completely reliant on them, but I don't get where people think they'll be useful for things like credit monitor and health care records. It makes no sense to me.
    - Cerium 9y ago
      Just to play devil's advocate, since I don't think they are a good solution either. Unlike healthcare I think you could use some of the properties of a blockchain to help reduce the risk of leaking personal information during credit checks. For example: you could prove your identity by making a transaction and then show a timely series of past payments.
  - badosu 9y ago
    > If you're not laughing then you need to admit you have a problem) Recognizing the most repeated joke on HN?
narak 9y ago
This seems like a legitimate use-case for permissioned ledgers where various lenders have necessarily siloed lending history data but also have an interest in seeing what data everyone else has for prospective lendees. In the longer run, you can imagine not just credit history data being exchanged (with the permission of the borrower perhaps) but also the ability to trade the loan products themselves, most of which is done OTC right now. Fixed income contracts can be described as "smart contracts" [1] [1] https://lexifi.com/files/resources/MLFiPaper.pdf https://lexifi.com/files/resources/MLFiPaper.pdf
- bastawhiz 9y ago
  That doesn't really fix any security issues, though, it just makes it easier to express who should have permission to access your data. Any system is still vulnerable with, say, a server configured with the credentials admin:admin.

nilved 9y ago

blockchain

tylersmith 9y ago
That would mean that instead of the data being in a single centralized location it's on every single node. That's the opposite of what we need. Edit: Assuming the colloquial use of the term "blockchain", a public database. In the sense that a blockchain is simply a data structure it's not necessarily a problem but also not a solution.
- nilved 9y ago
  No, the idea is that it's under collective control.
  - tylersmith 9y ago
    Why would you as a consumer want collective control over your data? Why should anybody but myself be able to affect my own credit?
    - nilved 9y ago
      That isn't how a blockchain works.
      - tylersmith 9y ago
        Great explanation /s Please tell me how a blockchain works then.
        nilved 9y ago
        Ok, sure. Why does having a public ledger imply anybody can control your data? Can I take your Bitcoin? You're being outright stupid tbh.

ams6110 9y ago

Sure, we could all pay interest rates that are based upon some amalgamated average risk profile, so you end up subsidizing deadbeats who don't pay their debts.

stnaoent23nt 9y ago
As someone who pays their credit card off in full every month, that would be fine with me. I never pay interest.
- bigheadpercoli 9y ago
  It's not only about credit cards. Mortgages, car loans, working day loans, etc. as well
otakucode 9y ago
Would that be more or less expensive than subsidizing the credit reporting agencies shareholders desire for aggressive growth?
- ams6110 9y ago
  I don't know. But in the proposed scenario, credit reporting agencies wouldn't exist at all.