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I doubt this would work. There are really only 3 vendors for this data, and most banks seem to have exclusive contracts by region for which data source they co

by x0x0 9y ago

I doubt this would work. There are really only 3 vendors for this data, and most banks seem to have exclusive contracts by region for which data source they consult. This, of course, goes hand in hand with the plummeting amount of national banks available in the US. We're really down to Wells Fargo, Citi, Chase, BOA, and one or two others. In my experience, my two credit unions -- and credit unions kind of suck anyway -- are only set up with a single CRA. So people have few choices of creditors and have very little negotiating power. I think the right answer is for there to be exactly one CRA and for it to be a pseudo-public and very heavily regulated.

anfilt 9y ago
I would enjoy not having a credit score. However, I also don't take loans out. --EDIT Not sure why I get the down vote. Pretty neutral comment. I think the credit score is just a sham. If someone wants to get a loan I don't see how a single number has any bearing on reliability. It boils a multi variable question into one number. Further, the number could be quite misleading. Also I don't think any 3rd party should have this data without a written contract from the individual. Maybe that will get more down-votes, but I at least can see some disagreement in that. However, "I would enjoy not having a credit score" is just a statement... I view loans negatively. If I can't save up for it. I don't need it. I am certainly not going to pay more for something thanks to that pesky interest. I also got rid of all my credit cards 5 years ago, and made certain to never take out any more debt. Not even for a house. The only exception I could see is if I started a business as it allows for additional cash when needed. For example more orders than anticipated, and I don't get paid till the customer has the product. Either, customers suffer delays or infuse some extra cash to increase cash flow, but then immediately pay it back.
- blindhippo 9y ago
  Loans can and should be used by individuals in two big ways: 1) spreading cash-flow over a long period (car loan) 2) investing in long-term gain (mortgage, education) By saying you shouldn't ever take on debt, it's similar to saying no business should take on investment capital, and governments should not invest in emerging markets. Determining how and where to take on liabilities, that is a more interesting discussion then simply saying debt is bad.
- FireBeyond 9y ago
  While I don’t think you deserved downvotes, as there was no “superior” attitude to your philosophy on loans, it’s just not realistic for a large variety of people (ther very vast majority). How many people can buy a home, cash? Should everyone else be renters in perpetuity? All sorts of things people might miss out on, from pets, to country living etc, because they can’t lay down between $100,000 and $300,000+ to buy a home “without a loan”. (I realize that there are a number of caveats to my statements, not everyone has to live in the most expensive part of the country, but not everyone can live in rural Iowa or Detroit, and not everyone has to have a pet, I’m just talking of how for very many people, the “no loans ever” attitude is not realistic).
  - optimusclimb 9y ago
    > How many people can buy a home, cash? Should everyone else be renters in perpetuity? Currently renting by choice vs. "buying". One might argue that when you "buy" a home with a mortgage, you very much still are a renter - you're just renting money. Potentially hundreds of thousands of dollars, for 15-30 years.
    - freehunter 9y ago
      There is a vast difference between renting an apartment vs buying a home on credit. When I rent, I can't do anything to the building without the landlord's approval. They may prohibit painting, but when I buy a house I can paint all I want. A landlord may limit what I can do with the ground around my "property", while "owning" a home means I can dig all I want. Having a home means I can have as many pets as I want without incurring extra rent, too. I can also choose my own parking situation, which is harder when renting. So no. I reject the idea that having a mortgage is the same as renting. Owning a home, even while paying a mortgage, offers a lot more freedom, of course while still owing money to someone. But it is fundamentally different from renting.
      - x0x0 9y ago
        Most importantly, for a home, your costs are mostly fixed, assuming a fixed rate mortgage. Taxes can change, but you get a voice in that. A landlord can wake up and raise rent arbitrarily in the vast majority of the US. It make take up to a year for that to take effect, but it still can. Owning shields you from that. Or from the landlord moving in upstairs neighbors who have a young kid.
- twblalock 9y ago
  > If someone wants to get a loan I don't see how a single number has any bearing on reliability. It boils a multi variable question into one number. That's the point! It's a way to aggregate a lot of complex things into a simple number that makes it easy for lenders to predict risk. It's not supposed to be perfect, and it doesn't need to be. It just needs to be predictive of risk for lenders. Clearly it is, or they would have stopped using it by now and moved on to another way of predicting risk -- probably another kind of numeric score, because of how useful they are. Imagine what a pain it would be if you had to provide proof that you paid your bills on time for the past 7+ years in order to get a loan, because the lender can't just get a report from Equifax.
  - anfilt 9y ago
    I think I should have that choice though. If you want the convenience go head give your data to the credit reporting agencies. I don't get loans. So I don't care.
    - chrisan 9y ago
      The problem would be all the data you _don't give_ You act like everyone is a good citizen, you may be, I may be, but people out there will cheat if left to their own reporting
      - twblalock 9y ago
        Yep, and the downside of that is that so many people will lie that lenders will assume everyone is lying. People with good credit who have nothing to hide would be worse off under a self-reporting regime because lenders won't believe them and will turn down their applications or demand an invasive level of financial information.
- Larrikin 9y ago
  In the US you're overpaying by not making your purchases with a credit card that you pay off every month. There are so many rewards programs and vendors typically are required to have the same price for credit and cash purchases.
  - ryandrake 9y ago
    > vendors typically are required to have the same price for credit and cash purchases. Tell that to pretty much every gas station out there and every little mom and pop restaurant that offers a "cash discount".
    - colejohnson66 9y ago
      Isn’t that a valid reason for a chargeback?
      - lotsofpulp 9y ago
        So you want people who can't afford credit cards with nice rewards, to subsidize those who do? Also, you are not privy to the contracts between merchants and card processors, so how would you know? And there may have been a law passed specifically forbidding card networks from forcing the same pricing. Edit:. Cash and debit are allowed to be different price than credit: https://www.nerdwallet.com/blog/credit-cards/credit-card-charged-more-gas-station/ https://www.nerdwallet.com/blog/credit-cards/credit-card-cha...
        colejohnson66 9y ago
        > So you want people who can't afford credit cards with nice rewards, to subsidize those who do? Where did I say that? > Also, you are not privy to the contracts between merchants and card processors, so how would you know? That’s why I asked a question instead of stating something as fact. Why are you so defensive in your reply?
        9y ago
- lozenge 9y ago
  The credit "score" number is mostly for consumers. Each bank using the credit reference agency has more detailed criteria they use.

by x0x0 9y ago

anfilt 9y ago

I would enjoy not having a credit score. However, I also don't take loans out. --EDIT Not sure why I get the down vote. Pretty neutral comment. I think the credit score is just a sham. If someone wants to get a loan I don't see how a single number has any bearing on reliability. It boils a multi variable question into one number. Further, the number could be quite misleading. Also I don't think any 3rd party should have this data without a written contract from the individual. Maybe that will get more down-votes, but I at least can see some disagreement in that. However, "I would enjoy not having a credit score" is just a statement... I view loans negatively. If I can't save up for it. I don't need it. I am certainly not going to pay more for something thanks to that pesky interest. I also got rid of all my credit cards 5 years ago, and made certain to never take out any more debt. Not even for a house. The only exception I could see is if I started a business as it allows for additional cash when needed. For example more orders than anticipated, and I don't get paid till the customer has the product. Either, customers suffer delays or infuse some extra cash to increase cash flow, but then immediately pay it back.

blindhippo 9y ago
Loans can and should be used by individuals in two big ways: 1) spreading cash-flow over a long period (car loan) 2) investing in long-term gain (mortgage, education) By saying you shouldn't ever take on debt, it's similar to saying no business should take on investment capital, and governments should not invest in emerging markets. Determining how and where to take on liabilities, that is a more interesting discussion then simply saying debt is bad.
FireBeyond 9y ago
While I don’t think you deserved downvotes, as there was no “superior” attitude to your philosophy on loans, it’s just not realistic for a large variety of people (ther very vast majority). How many people can buy a home, cash? Should everyone else be renters in perpetuity? All sorts of things people might miss out on, from pets, to country living etc, because they can’t lay down between $100,000 and $300,000+ to buy a home “without a loan”. (I realize that there are a number of caveats to my statements, not everyone has to live in the most expensive part of the country, but not everyone can live in rural Iowa or Detroit, and not everyone has to have a pet, I’m just talking of how for very many people, the “no loans ever” attitude is not realistic).
- optimusclimb 9y ago
  > How many people can buy a home, cash? Should everyone else be renters in perpetuity? Currently renting by choice vs. "buying". One might argue that when you "buy" a home with a mortgage, you very much still are a renter - you're just renting money. Potentially hundreds of thousands of dollars, for 15-30 years.
  - freehunter 9y ago
    There is a vast difference between renting an apartment vs buying a home on credit. When I rent, I can't do anything to the building without the landlord's approval. They may prohibit painting, but when I buy a house I can paint all I want. A landlord may limit what I can do with the ground around my "property", while "owning" a home means I can dig all I want. Having a home means I can have as many pets as I want without incurring extra rent, too. I can also choose my own parking situation, which is harder when renting. So no. I reject the idea that having a mortgage is the same as renting. Owning a home, even while paying a mortgage, offers a lot more freedom, of course while still owing money to someone. But it is fundamentally different from renting.
    - x0x0 9y ago
      Most importantly, for a home, your costs are mostly fixed, assuming a fixed rate mortgage. Taxes can change, but you get a voice in that. A landlord can wake up and raise rent arbitrarily in the vast majority of the US. It make take up to a year for that to take effect, but it still can. Owning shields you from that. Or from the landlord moving in upstairs neighbors who have a young kid.
twblalock 9y ago
> If someone wants to get a loan I don't see how a single number has any bearing on reliability. It boils a multi variable question into one number. That's the point! It's a way to aggregate a lot of complex things into a simple number that makes it easy for lenders to predict risk. It's not supposed to be perfect, and it doesn't need to be. It just needs to be predictive of risk for lenders. Clearly it is, or they would have stopped using it by now and moved on to another way of predicting risk -- probably another kind of numeric score, because of how useful they are. Imagine what a pain it would be if you had to provide proof that you paid your bills on time for the past 7+ years in order to get a loan, because the lender can't just get a report from Equifax.
- anfilt 9y ago
  I think I should have that choice though. If you want the convenience go head give your data to the credit reporting agencies. I don't get loans. So I don't care.
  - chrisan 9y ago
    The problem would be all the data you _don't give_ You act like everyone is a good citizen, you may be, I may be, but people out there will cheat if left to their own reporting
    - twblalock 9y ago
      Yep, and the downside of that is that so many people will lie that lenders will assume everyone is lying. People with good credit who have nothing to hide would be worse off under a self-reporting regime because lenders won't believe them and will turn down their applications or demand an invasive level of financial information.
Larrikin 9y ago
In the US you're overpaying by not making your purchases with a credit card that you pay off every month. There are so many rewards programs and vendors typically are required to have the same price for credit and cash purchases.
- ryandrake 9y ago
  > vendors typically are required to have the same price for credit and cash purchases. Tell that to pretty much every gas station out there and every little mom and pop restaurant that offers a "cash discount".
  - colejohnson66 9y ago
    Isn’t that a valid reason for a chargeback?
    - lotsofpulp 9y ago
      So you want people who can't afford credit cards with nice rewards, to subsidize those who do? Also, you are not privy to the contracts between merchants and card processors, so how would you know? And there may have been a law passed specifically forbidding card networks from forcing the same pricing. Edit:. Cash and debit are allowed to be different price than credit: https://www.nerdwallet.com/blog/credit-cards/credit-card-charged-more-gas-station/ https://www.nerdwallet.com/blog/credit-cards/credit-card-cha...
      - colejohnson66 9y ago
        > So you want people who can't afford credit cards with nice rewards, to subsidize those who do? Where did I say that? > Also, you are not privy to the contracts between merchants and card processors, so how would you know? That’s why I asked a question instead of stating something as fact. Why are you so defensive in your reply?
        9y ago
lozenge 9y ago
The credit "score" number is mostly for consumers. Each bank using the credit reference agency has more detailed criteria they use.