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>Credit scores aren't perfect, but at least they're based on information relevant to the question at hand: whether you could repay a loan. Well if other (non-f

>Credit scores aren't perfect, but at least they're based on information relevant to the question at hand: whether you could repay a loan. Well if other (non-financial) things are correlated, how are they not relevant? Should we actively hide information from loan providers, making loans more expensive for others to "protect"( I say protect with quotes, because really it is just a naked handout to people) a few? If these models are wrong, that is just a business opportunity for others to fix and price loans better. I support privacy laws, but that argument has always seemed to be a strange way to argue for it.

deleted 5y ago
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floatingatoll 5y ago
As of when I posted this comment, there's a formatting error in your statement — there's a whitespace character after your second opening parentheses that was meant to precede it. That typo indicates that the component of your credit score that is derived from your HN participation should be scored lower than those whose HN comments do not include any typos, because if you're more likely to overlook a single-character error, then you're more likely to overlook a loan payment. By your argument, it is permissible and appropriate for a credit rating company to make use of any signal — such as that typo — in their calculations. It's a business opportunity to make use of HN's freely-available data to charge you a higher interest rate for loans, because you made a typo, as by the evaluation metric "typos on HN" you're more careless than someone with fewer. It may or may not end up actually being an effective tool for increasing the accuracy of a credit rating, but there's no law prohibiting a US credit agency from trying it out today. I do not feel that this is acceptable. I think it's an invasion of privacy to incorporate that information into your financial score, even if it technically would improve the precision of the score when applied to everyone in a society. I think that credit scores should have their inputs restricted by law to only consider your financial behaviors. ps. The above example is impersonal and generic, and the point I'm making is not intended in any way to actually reflect poorly upon you at all. I do not as an individual consider your typo to in any way detract from your statement, and I think it's inappropriate to judge you so harshly as I suggest a credit agency would above. You should not be shamed or penalized for a typo in this forum.
- User23 5y ago
  I'd be interested to know what the YCombinator "credit score" for founders looks like.
  - floatingatoll 5y ago
    I wouldn't, but sadly, some enterprising person will no doubt take use this idea to name and shame people, which will have a silencing effect on future founders.
tylermenezes 5y ago
For one, correlation != causation For two, it's arguably a good public policy to judge people on the basis of what they've done, and not on the basis of statistical correlation to what other people have done. Can you imagine i.e. having to post to Instagram regularly to get a loan, because some algorithm noticed that people who pay back their loans happen to post frequently on Instagram (when in reality the correlation is because people working salaried jobs have the time to post lots on Instagram, and people working minimum wage jobs don't)?
- loeg 5y ago
  > For one, correlation != causation > For two, it's arguably a good public policy to judge people on the basis of what they've done, and not on the basis of statistical correlation to what other people have done. Existing credit scores are based on non-causal correlation models derived from the behavior of others. Social-media based credit scores would not be any different in this regard. I agree that credit scores based on social media posting are nonsense, but mostly because (1) it's so invasive and (2) I don't think it actually usefully correlates with anything. > Can you imagine i.e. having to post to Instagram regularly to get a loan, because some algorithm noticed that people who pay back their loans happen to post frequently on Instagram (when in reality the correlation is because people working salaried jobs have the time to post lots on Instagram, and people working minimum wage jobs don't)? Yeah. Some of the biggest factors in existing (US) credit scores are: on-time payment history; credit card use as a percent of limits; and average age of credit. All of these correlate to affluence/wealth. Affluent/wealthy people can easily pay bills on time; affluent people are given higher credit limits, which makes the "use %" ratio lower; and age of credit is obviously related to age, and older people are wealthier than younger.

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floatingatoll 5y ago

As of when I posted this comment, there's a formatting error in your statement — there's a whitespace character after your second opening parentheses that was meant to precede it. That typo indicates that the component of your credit score that is derived from your HN participation should be scored lower than those whose HN comments do not include any typos, because if you're more likely to overlook a single-character error, then you're more likely to overlook a loan payment. By your argument, it is permissible and appropriate for a credit rating company to make use of any signal — such as that typo — in their calculations. It's a business opportunity to make use of HN's freely-available data to charge you a higher interest rate for loans, because you made a typo, as by the evaluation metric "typos on HN" you're more careless than someone with fewer. It may or may not end up actually being an effective tool for increasing the accuracy of a credit rating, but there's no law prohibiting a US credit agency from trying it out today. I do not feel that this is acceptable. I think it's an invasion of privacy to incorporate that information into your financial score, even if it technically would improve the precision of the score when applied to everyone in a society. I think that credit scores should have their inputs restricted by law to only consider your financial behaviors. ps. The above example is impersonal and generic, and the point I'm making is not intended in any way to actually reflect poorly upon you at all. I do not as an individual consider your typo to in any way detract from your statement, and I think it's inappropriate to judge you so harshly as I suggest a credit agency would above. You should not be shamed or penalized for a typo in this forum.

User23 5y ago
I'd be interested to know what the YCombinator "credit score" for founders looks like.
- floatingatoll 5y ago
  I wouldn't, but sadly, some enterprising person will no doubt take use this idea to name and shame people, which will have a silencing effect on future founders.

tylermenezes 5y ago

For one, correlation != causation For two, it's arguably a good public policy to judge people on the basis of what they've done, and not on the basis of statistical correlation to what other people have done. Can you imagine i.e. having to post to Instagram regularly to get a loan, because some algorithm noticed that people who pay back their loans happen to post frequently on Instagram (when in reality the correlation is because people working salaried jobs have the time to post lots on Instagram, and people working minimum wage jobs don't)?

loeg 5y ago
> For one, correlation != causation > For two, it's arguably a good public policy to judge people on the basis of what they've done, and not on the basis of statistical correlation to what other people have done. Existing credit scores are based on non-causal correlation models derived from the behavior of others. Social-media based credit scores would not be any different in this regard. I agree that credit scores based on social media posting are nonsense, but mostly because (1) it's so invasive and (2) I don't think it actually usefully correlates with anything. > Can you imagine i.e. having to post to Instagram regularly to get a loan, because some algorithm noticed that people who pay back their loans happen to post frequently on Instagram (when in reality the correlation is because people working salaried jobs have the time to post lots on Instagram, and people working minimum wage jobs don't)? Yeah. Some of the biggest factors in existing (US) credit scores are: on-time payment history; credit card use as a percent of limits; and average age of credit. All of these correlate to affluence/wealth. Affluent/wealthy people can easily pay bills on time; affluent people are given higher credit limits, which makes the "use %" ratio lower; and age of credit is obviously related to age, and older people are wealthier than younger.