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Credit reporting was a big tool for equality. Before credit reporting, you basically had loans limited to people that were known personally - if you didn't know
by trothamel 7y ago
Credit reporting was a big tool for equality. Before credit reporting, you basically had loans limited to people that were known personally - if you didn't know someone with money that had a high opinion of you, you were SOL.
Now, creditworthiness is judged on more objective measures, which makes it easier to buy a house, start a business, etc. I think we should hold credit organizations meaningfully responsible for data breaches - but at the same time, let's not get rid of the benefits by tossing credit reporting out entirely.
- asdff 7y ago>Now, creditworthiness is judged on more objective measures Except it isn't. In the current system, you could be signed on to your parents credit card in high school and get a far better credit rating than someone who got their first credit card after college. Building credit is pretty easy to do and easy to game. An objective system would be if the bank just saw your income and expenses and debts to determine whether or not you're worthy of a loan, not that you've had that capital one card in your sock drawer for five years and use your amex for your netflix subscription. My little credit reporting anecdote is that of a good friend who came from Germany to practice medicine. Getting a home loan was a pain in the ass because he had zero credit history, despite his hourly rate being multiples of whatever the branch manager of that bank was making.