7 ms·

how do you stop fraud from people opening a new ID and taking out loans with it instead of their "main" ID ?

by solotronics 9y ago

deleted 9y ago
[deleted]
mLuby 9y ago
What lender would trust a new id with no history?
- bhhaskin 9y ago
  How would you get history if no one trusts an id with no history?
  - zAy0LfpBZLC8mAC 9y ago
    https://en.wikipedia.org/wiki/Tit_for_tat https://en.wikipedia.org/wiki/Tit_for_tat
  - jeremyjh 9y ago
    This is not a new problem. The solution is the same as it is today, you must build a history with small limit revolving lines, cosigners and guarantors.
  - groby_b 9y ago
    Slowly. Ask anybody who immigrated to the US, it's a royal pain. (Especially since you have global brands - like e.g. Mastercard - incapable of referencing their data from outside the US). You start with a secured credit card for $200. Next, you buy a clunker of a car for all-cash. At that point, you have enough history to get a CC with $500-$1,000 limit. Now you pay everything through that CC. And make damn sure you're always 100% on time - a single slip costs you a lot of time setting up that history. After a year or two of that, you usually get a CC covering one or two months of income. Keep building. It's a really painful process.
    - goialoq 9y ago
      Or you start by getting a job with direct deposit, and depositing some savings in a bank account.
      - boondaburrah 9y ago
        That doesn't help at all, unfortunately.
      - defined 9y ago
        In the USA, what builds credit scores is showing a pattern of using revolving credit and servicing the debt over a period of time. You are penalized if you use too much of your available credit. You are also penalized if you use too little of it, as I found out when I paid off the balance of the one remaining card that held a balance, and saw my credit score hit by about 15 points shortly thereafter. There are other rules, too. Basically, I can only conclude that we are encouraged to be 'good citizens" by borrowing money and paying interest on it while slowly paying back the principal. People who live on a cash-only basis, which was considered to be a respectable practice not that long ago (borrowing was shameful) have terrible credit scores. So what, you may ask? There are very real and increasing disincentives to having bad or no credit. Creditworthiness (in the form of a nice, easy to understand number) is being taken more and more by various entities as a sign of responsibility and even good character. A credit score is now used by some entities, beyond the mainstay car dealers, to judge risk and character: apartment rentals and employers, to name two. I'm not suggesting that all employers and apartment management companies do this, only that the trend (I have no citations but it should be searchable) is on the increase. The bottom line is that in the USA today, credit scores depend on how - and how much - you borrow and repay. Furthermore, the higher your credit score, the better you are treated, to a degree: better rates on loans, no problems getting a job (all other things being equal), and so on. The opposite is true for bad scores. This is one of the many ways we are corraled into greasing the gears of the economy, and it is a wasteland for cash-only operators (unless, I suppose, they have a huge amount of cash).
        syshum 9y ago
  - metellus 9y ago
    The same way someone new (young people, immigrants) gains history now. Start with something low/no risk in order to build history.
  - richardknop 9y ago
    You don’t really need a history. I.e. it’s very possible to get around just fine without credit card or loans. Most people I know in continental Europe just have debit cards and only buy things they have enough cash in their bank account to afford. The only exception is mortgage which is usually the only loan people take their entire life. And it’s possible to get it without having a credit score. You’ll need your complete history of employment and addresses and based on that bank can borrow you money. Perhaps car leasing is another loan people might take but that works similar way. Borrowing money to buy everything seems to be an American fetish (but also present in U.K. which is most America like part of Europe and Asia, not continental Europe though). It always seemed insane to me to have to borrow money from bank to buy a latte or groceries.
    - lmm 9y ago
      Having my consumption expenses separate from my actual bank account is quite nice - it means my bank account statement gives me a quick summary of what I spent this month (x went to my mortgage, y went on utility bills, z went on buying things) and then my credit card statement has the details. You could see it as borrowing money for your latte but you can also see it as being billed at the end of the month for your lattes which is normal for many things. In principle I'm all about living within your means, but really why wouldn't I do things this way and get a month's grace on paying for everything and free plane tickets every so often?
      - Double_a_92 9y ago
        Because I don't want to pay an extra 2% "tax" to the banks, for loans that I don't need? The only place I use a credit card is online. So i can pay quickly and worldwide.
        lmm 9y ago
        How do you end up paying anything? I don't. A few shops charge a fee for using a credit card, in which case I'd use cash[1], but that's rare. [1] Not actually true, because I find the convenience of the card is worth it - but I understand people taking the opposite position.
  - kelnos 9y ago
    The same way you do now, as a new adult: apply for a very low-limit credit card, get an older relative to co-sign a loan for you, etc. Over time you build history that shows you are (or are not) trustworthy to lend to.
  - djrogers 9y ago
    You skip it - don’t have a credit score, and when you finally get around to buying a home use a lender that will manually underwrite your mortgage. The fallacy of needing to use debt for day to day living is ruining people.

how do you stop fraud from people opening a new ID and taking out loans with it instead of their "main" ID ?

deleted 9y ago

[deleted]

mLuby 9y ago

What lender would trust a new id with no history?

bhhaskin 9y ago
How would you get history if no one trusts an id with no history?
- zAy0LfpBZLC8mAC 9y ago
  https://en.wikipedia.org/wiki/Tit_for_tat https://en.wikipedia.org/wiki/Tit_for_tat
- jeremyjh 9y ago
  This is not a new problem. The solution is the same as it is today, you must build a history with small limit revolving lines, cosigners and guarantors.
- groby_b 9y ago
  Slowly. Ask anybody who immigrated to the US, it's a royal pain. (Especially since you have global brands - like e.g. Mastercard - incapable of referencing their data from outside the US). You start with a secured credit card for $200. Next, you buy a clunker of a car for all-cash. At that point, you have enough history to get a CC with $500-$1,000 limit. Now you pay everything through that CC. And make damn sure you're always 100% on time - a single slip costs you a lot of time setting up that history. After a year or two of that, you usually get a CC covering one or two months of income. Keep building. It's a really painful process.
  - goialoq 9y ago
    Or you start by getting a job with direct deposit, and depositing some savings in a bank account.
    - boondaburrah 9y ago
      That doesn't help at all, unfortunately.
    - defined 9y ago
      In the USA, what builds credit scores is showing a pattern of using revolving credit and servicing the debt over a period of time. You are penalized if you use too much of your available credit. You are also penalized if you use too little of it, as I found out when I paid off the balance of the one remaining card that held a balance, and saw my credit score hit by about 15 points shortly thereafter. There are other rules, too. Basically, I can only conclude that we are encouraged to be 'good citizens" by borrowing money and paying interest on it while slowly paying back the principal. People who live on a cash-only basis, which was considered to be a respectable practice not that long ago (borrowing was shameful) have terrible credit scores. So what, you may ask? There are very real and increasing disincentives to having bad or no credit. Creditworthiness (in the form of a nice, easy to understand number) is being taken more and more by various entities as a sign of responsibility and even good character. A credit score is now used by some entities, beyond the mainstay car dealers, to judge risk and character: apartment rentals and employers, to name two. I'm not suggesting that all employers and apartment management companies do this, only that the trend (I have no citations but it should be searchable) is on the increase. The bottom line is that in the USA today, credit scores depend on how - and how much - you borrow and repay. Furthermore, the higher your credit score, the better you are treated, to a degree: better rates on loans, no problems getting a job (all other things being equal), and so on. The opposite is true for bad scores. This is one of the many ways we are corraled into greasing the gears of the economy, and it is a wasteland for cash-only operators (unless, I suppose, they have a huge amount of cash).
      - syshum 9y ago
- metellus 9y ago
  The same way someone new (young people, immigrants) gains history now. Start with something low/no risk in order to build history.
- richardknop 9y ago
  You don’t really need a history. I.e. it’s very possible to get around just fine without credit card or loans. Most people I know in continental Europe just have debit cards and only buy things they have enough cash in their bank account to afford. The only exception is mortgage which is usually the only loan people take their entire life. And it’s possible to get it without having a credit score. You’ll need your complete history of employment and addresses and based on that bank can borrow you money. Perhaps car leasing is another loan people might take but that works similar way. Borrowing money to buy everything seems to be an American fetish (but also present in U.K. which is most America like part of Europe and Asia, not continental Europe though). It always seemed insane to me to have to borrow money from bank to buy a latte or groceries.
  - lmm 9y ago
    Having my consumption expenses separate from my actual bank account is quite nice - it means my bank account statement gives me a quick summary of what I spent this month (x went to my mortgage, y went on utility bills, z went on buying things) and then my credit card statement has the details. You could see it as borrowing money for your latte but you can also see it as being billed at the end of the month for your lattes which is normal for many things. In principle I'm all about living within your means, but really why wouldn't I do things this way and get a month's grace on paying for everything and free plane tickets every so often?
    - Double_a_92 9y ago
      Because I don't want to pay an extra 2% "tax" to the banks, for loans that I don't need? The only place I use a credit card is online. So i can pay quickly and worldwide.
      - lmm 9y ago
        How do you end up paying anything? I don't. A few shops charge a fee for using a credit card, in which case I'd use cash[1], but that's rare. [1] Not actually true, because I find the convenience of the card is worth it - but I understand people taking the opposite position.
- kelnos 9y ago
  The same way you do now, as a new adult: apply for a very low-limit credit card, get an older relative to co-sign a loan for you, etc. Over time you build history that shows you are (or are not) trustworthy to lend to.
- djrogers 9y ago
  You skip it - don’t have a credit score, and when you finally get around to buying a home use a lender that will manually underwrite your mortgage. The fallacy of needing to use debt for day to day living is ruining people.