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When will people realize that the whole idea of a "credit score" is insanely bad - just lend to anyone under the same conditions, do personal checks on case by

by nnq 8y ago

When will people realize that the whole idea of a "credit score" is insanely bad - just lend to anyone under the same conditions, do personal checks on case by case basis etc. There are parts of the world that have all regular financial tools like mortgages and all without the credit score part. Keeping a "score" is just a means of discrimination and oppression. Yeah, credit will become more expensive, as it should be! People should only lend money with verified collateral etc. And maybe it's not "fair" to lend anyone at the same rate, just as it's not "fair" to have "universal" health insurance. But you know what? F fairness! Nobody needs "fair", we need systems that work, and do so reliably and in easily understandable ways, making the word a place you would want to live in. We can afford to de-optimize some aspects of the economy in order to get a better quality of life with low stress and all. Equality and anonymity is what everyone needs more of, not "fairness" and invasion of privacy (aka "transparency"), with the former usually used to justify the latter.

perl4ever 8y ago
I don't think universal credit availability is analogous to universal health insurance, for specific reasons. People who are against universal health insurance often, I think, imagine spending vast or unlimited amounts should they have a terminal illness. And therefore, they are afraid that society cannot afford to provide that to everyone. I think that is not a real concern, because the possibilities for treatment are limited in practice sufficiently that universal health insurance is workable. Billionaires do not typically spend all their billions on trying to stave off death. By contrast, universal availability of credit has no such inherent limit on demand. One person who would otherwise have poor credit could impoverish a nation, in principle, because borrowed money can be utilized for any desire. If we do put limits on the credit provided to people, then we have not changed the nature of it to make it universal and equal and something will be needed to discriminate, even if we don't call it a credit score.
astura 8y ago
So you think requiring someone to have verified collateral to take out a loan is less oppressive than allowing someone who doesn't have any collateral to use solely their reputation to borrow money very cheaply? Your hypothetical system makes financial products only available to wealthy. That's pretty much the definition of oppressive. A system where more people have more access to more products is the fairer one. Debt can be an important tool if used correctly.
- astura 8y ago
  And without collateral you clearly can't loan to everyone because this is what happens: Borrow money at 1000% interest Don't make any payments. What are they going to do? Sue me? I can't pay, I'm in debt. Hookers and blow for everyone. Borrow more money at 1000% interest. They can't say no!!! Debt for everyone!! Make Payments? Lol. Borrow more money. Don't make payments. Borrow more money. Don't make payments. Continue on forever. It's a money spigot. Nobody would be willing to lend to anyone in this situation without serious collateral and only at very high rates and limited to low risk loans. Reinstituting debtors prison would be the only fix for this problem. And that's 10000 times more oppressive than credit scores. Don't lend to people in debt? Congratulations, now you're back to credit scores!

by nnq 8y ago

perl4ever 8y ago

I don't think universal credit availability is analogous to universal health insurance, for specific reasons. People who are against universal health insurance often, I think, imagine spending vast or unlimited amounts should they have a terminal illness. And therefore, they are afraid that society cannot afford to provide that to everyone. I think that is not a real concern, because the possibilities for treatment are limited in practice sufficiently that universal health insurance is workable. Billionaires do not typically spend all their billions on trying to stave off death. By contrast, universal availability of credit has no such inherent limit on demand. One person who would otherwise have poor credit could impoverish a nation, in principle, because borrowed money can be utilized for any desire. If we do put limits on the credit provided to people, then we have not changed the nature of it to make it universal and equal and something will be needed to discriminate, even if we don't call it a credit score.

astura 8y ago

So you think requiring someone to have verified collateral to take out a loan is less oppressive than allowing someone who doesn't have any collateral to use solely their reputation to borrow money very cheaply? Your hypothetical system makes financial products only available to wealthy. That's pretty much the definition of oppressive. A system where more people have more access to more products is the fairer one. Debt can be an important tool if used correctly.

astura 8y ago
And without collateral you clearly can't loan to everyone because this is what happens: Borrow money at 1000% interest Don't make any payments. What are they going to do? Sue me? I can't pay, I'm in debt. Hookers and blow for everyone. Borrow more money at 1000% interest. They can't say no!!! Debt for everyone!! Make Payments? Lol. Borrow more money. Don't make payments. Borrow more money. Don't make payments. Continue on forever. It's a money spigot. Nobody would be willing to lend to anyone in this situation without serious collateral and only at very high rates and limited to low risk loans. Reinstituting debtors prison would be the only fix for this problem. And that's 10000 times more oppressive than credit scores. Don't lend to people in debt? Congratulations, now you're back to credit scores!