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I would think there has to also be some trend whereby lending to untrusted third parties has actually become cheaper and less risky. As in, creditors have recou
by nonameiguess 5y ago
I would think there has to also be some trend whereby lending to untrusted third parties has actually become cheaper and less risky. As in, creditors have recourse to a court system and police they don't have to personally fund, rather than paying enforcers to find people and break knees. And wages these days are far more stable than hundreds of years ago, so whoever you loaned money to is a lot less likely to suffer drastic life-changing events that leave them unable to pay in a way you didn't anticipate. We also have better data and better predictive models. Insurance is more widespread. Some insurance is directly provided by the government with nearly zero chance of not paying. All of these factors should be expected to make it cheaper to borrow money.
- dnautics 5y agoI agree with everything except the courts and police: they don't really do any debt-related enforcement activities anymore. On the other hand I suppose you can cynically note that the police make discriminating between a high credit risk and a low credit risk "easy" by having a (possibly unfair) ultrafilter: "did you spend time in jail"
- lotsofpulp 5y agoI have never seen a credit application ask if you have been incarcerated, nor have I heard of lenders searching people’s criminal records.
- pvarangot 5y agoIt's definitely there on some mortgages and I saw it a few months ago on a friends car loan.
- dnautics 5y agoeven so, incarceration makes servicing recurring payments much harder, not to mention bail... So (cynically speaking) it's even better because if you are rich you're likely to have your credit unhurt by going to jail.
- lotsofpulp 5y agoThat falls under the trivial fact of life being easier if you have access to more money. Surely a lender seeing a history of missing payments is relevant to their business, regardless of the borrowers situation.
- dnautics 5y agoThatsthepoint
- lotsofpulp 5y ago> police make discriminating between a high credit risk and a low credit risk "easy" by having a (possibly unfair) ultrafilter: "did you spend time in jail" The point is it is fair for a lender to use history of not paying on time as a factor in determining riskiness of borrower. It can be unfair to use the sole fact of having been in jail as a factor in determining riskiness of borrower, but in my experience, no lender checks for that.
- deleted 5y ago[deleted]
- bserge 5y agoIn some smarter countries. The rest of the world goes to prison for unpaid debt.