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Companies already have this service provided by the judicial system, it's called bankruptcy and it's a public record. If theres a market for more detail than t
by spaceribs 8y ago
Companies already have this service provided by the judicial system, it's called bankruptcy and it's a public record.
If theres a market for more detail than that, it's a bullshit market, because how that report gets generated is entirely arbitrary.
- harryh 8y ago"People who have paid back previous loans on schedule are more likely to pay back future loans on schedule" is not arbitrary.
- spaceribs 8y agoThat is already described via bankruptcy.
- harryh 8y agoThat is not at all true. You don't go bankrupt when you are late paying back a loan or miss payments or even default on a loan completely.
- Haul4ss 8y agoNo it's not. You can be behind on payments without filing for bankruptcy. You can have a debt sent to collections without filing for bankruptcy. There are all sorts of cases where a person is not trustworthy with money that do not show up in the public record. That's why credit bureaus came to exist, and although their business practices and data security leave much to be desired, I understand why they exist in the first place.
- spaceribs 8y agoCredit bureaus came to exist because of this murkiness when it comes to contractual obligations. If you provide a grace period around a deadline, it's on you, and not something which should be punished against. If they broke the contract, it's on you to bring them to court. Apparently companies thought it was to expensive to enforce contracts, so they decided to create this extrajudicial system. My point is, if you can't physically pay your debts, you can file for bankruptcy. That is the public record.
- tptacek 8y agoThe average duration of a contested civil court case is on the order of 2-3 years. The courts are not going to resolve even a significant fraction of delinquencies, and are not a real recourse in the main for creditors.
- spaceribs 8y agoI agree! Until that aspect is solved, the standards of when you get reported and for what are entirely private, arbitrary, and have long-lasting effects on your overall wellbeing.
- tptacek 8y agoSo, like, in a parallel universe where we reinvent the civil legal system, you might have a point? But in this universe, you concede that Equifax has a practical purpose?
- spaceribs 8y agoI don't consider arbitrary systems practical. I don't define myself by what Equifax thinks of me, and neither should a bank. Unless a proper, accountable, civil system exists, call it for what it is: Bullshit.
- tptacek 8y agoUS bankruptcy is not a service provided by the judicial system to companies. It's a service provided by the US courts to consumers. Our bankruptcy law is notably among the most liberal and consumer-friendly in the world. From experience helping family members: you can be hundreds of thousands of dollars in debt before bankruptcy becomes a real option. Entire sectors of the consumer finance market are dedicated to keeping them out of bankruptcy, where they become total writeoffs to creditors. I watched creditors offer to settle mid-5-figure delinquencies for nickels on the dollar simply because that was the best they were going to get with a bankruptcy on the table. The idea that creditors could simply extend credit uniformly to everyone who hasn't declared bankruptcy in the past is ludicrous.
- spaceribs 8y agoI'm not suggesting that we do that, I am saying that not paying a debt outside of a predefined grace period is a contractual and legal issue, which would be a part of a civil dispute, and also a matter of public record.
- tptacek 8y agoHow does that address the problem that credit scores solve? If I'm a lender given no data about a potential debtor and my only recourse is to the courts, I'm not going to lend to anyone --- or, if I do, it'll be based on far more arbitrary and discriminatory standards, like whether the right poobah at the local Chamber of Commerce vouches for you personally. That's how it worked before we had credit scores.