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Shadow credit score could decide whether you get an apartment

211 points by danso 5y ago

ouid 5y ago
- alexklark 5y ago
  Well, in the world of empty houses and homeless people, who cares if some more losers wont get a flat, or pay their whole salary to avoid eviction? Home and rent prices should go up, and people should work harder and longer to afford luxury of having roof over head.
999900000999 5y ago
I don't really see the point of this article, it's well known bankruptcies stay on your credit report for 10 years. With the recent rent moratoriums, I expect landlords to get even harsher. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state . If this person went and filed for a second bankruptcy, they could then delay the eviction by years. The bigger issue of course is we haven't built up enough new housing over the last 40 years, you want there to be so much available housing landlords can't be selective. They have to take the risk of losing a bit of money, because they're going to lose an absolute ton if they let their units remain vacant.
- notch656a 5y ago
  Yep, easy come easy go. The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency.
  - kylehotchkiss 5y ago
    That would very quickly escalate the already very bad homelessness crisis in many parts of the country. Some levels of tenant protection are a way society can help their citizens get back on feet after a difficult time, which almost every person will encounter. Freeloaders will eventually get kicked out.
    - notch656a 5y ago
      I'd argue the effect may be the opposite. Tenant protections lead to homelessness by forcing landlords to be selective against vulnerable peoples, making it harder to get back on their feet after difficult times. Risk in renting to these people is greatly reduced if you can toss them out as soon as they stop paying.
      - otterley 5y ago
        Either way, you’re making someone homeless, which is an intractable problem as long as the housing demand exceeds supply. The only change being made is the criteria for who gets to suffer.
        erik_seaberg 5y ago
        Penalizing every innocent potential renter who’s more likely to default on a lease is worse than only penalizing renters who actually do.
    - endisneigh 5y ago
      It’s a complicated issue - my anecdote is that any risk will ultimately be manifested in the form of more selectivity on the landlords end.
  - LorenPechtel 5y ago
    Which would result in more improper evictions. As it is we have already seen multiple examples of landlords losing checks so they can evict and rent to someone else at a higher rate. I've wondered about taking a different approach: The landlord is free to evict on the day of delinquency, but must move the possessions to a storage facility (paying a month's rent at that time) and they must post a substantial bond. If the tenant shows the eviction was improper they get the bond + costs. (And I would apply the same thing to foreclosures.) Instead of a long process of showing that they are acting properly they are putting up a substantial financial promise that they are acting properly. Make improper actions a costly mistake and there will be few of them.
    - oh_sigh 5y ago
      How would that process help in the "lost check" scenario you mention?
      - jfk13 5y ago
        Somewhat of an aside, but as a non-American, I find it quite weird that it seems to be common to pay rent with a monthly check. Every place I've rented, I've paid automatically by standing order. (Oh, except in a couple of third-world countries, where cash was the norm.)
        MaysonL 5y ago
        The building I live in has an online payment option, but the only payment option that the organization doing the collection takes is PayPal. Fuck PayPal, I can go to the bank and get a check (I haven't personally written a check for decades).
      - LorenPechtel 5y ago
        It wouldn't, but it would help with other bad evictions.
  - vkou 5y ago
    If you're looking to increase the number of temporarily homeless people, this sounds like a great approach. Unfortunately, temporarily homeless people have a habit of turning into chronic homeless people. And living in a city that's full of chronic homeless people, I don't think we need more. Your comfort and convenience as a landlord does not rank higher than my desire to not step over human shit on my way to work.
    - notch656a 5y ago
      Raising regulatory barriers increases cost of housing. Increased cost of housing disproportionately effects those who have less money. Eviction protections are incredibly harmful to homeless as it makes it can make it risky (costly) to rent to homeless, taking housing even further out of reach. Homeless become even less competitive renters. Your comfort and convenience to have the option not to pay a landlord does not rank higher than the desire of homeless to have better access to housing. Places with homeless problems badly need to remove these protections from renters.
      - vkou 5y ago
        Except it doesn't work the way you describe, because all it does is determine the quality of tenant that gets to stay in a housing unit in a shortage. Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous - doubly and triply so if you are the kind of marginal person that gets kicked out of their home. It is incredibly disruptive to their life - much moreso than for someone in a stable situation not being able to find a different place to live. Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious. If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum. If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this. Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer. Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
  - HWR_14 5y ago
    > The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency. The quickest way to get landlords to become less selective is to say "any vacant apartment/home not occupied by at least one fulltime resident can be claimed by someone homeless as of [date]." You'd have landlords begging people to sign leases (and people would because then they would get a sure nice apartment as opposed to a lottery for one of the few ones left). Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice.
    - notch656a 5y ago
      >Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice. What an entitled viewpoint. It's not their home; an entirely different person owns it and they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it. The person having their home ripped away at a moment's notice is the landlord.
      - HWR_14 5y ago
        > It's not their home; an entirely different person owns it It's not their house. It certainly is their home. I would prefer those be the same person as often as possible to align incentives. > they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract. It's not uncommon for landlords to be the first party to breach the contract either intentionally (e.g. losing checks to move a tenant at below market rates out), neglectfully (e.g. ignoring upkeep or repairs) or unintentionally (e.g. entering at will). Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved. > The person having their home ripped away at a moment's notice is the landlord. Unless the landlord lives there, the landlord's home is unrelated to the property.
        notch656a 5y ago
- danso 5y ago
  The article isn't just about bankruptcies. It's about a tenant scoring system that has as much power over your life as the credit scoring system, albeit with far less regulation and consumer protections: > Tenant screening companies compile information beyond what’s in renters’ credit reports, including criminal and eviction filings. They say this data helps give landlords a better idea of who will pay on time and who will be a good tenant. The firms typically assign applicants scores or provide landlords a yes-or-no recommendation. > A ProPublica review found that such ratings have come to serve as shadow credit scores for renters. But compared to credit reporting, tenant screening is less regulated and offers fewer consumer protections — which can have dire consequences for applicants trying to secure housing.
  - Mountain_Skies 5y ago
    Selecting tenants is a legal minefield. As a result, many landlords find it safer to offload that decision to a third party. It sounds like these third-party rating services, including their "rent, don't rent" decisions, are filling a need but are ahead of legislation to curb some of their excesses.
  - ilikehurdles 5y ago
    If eviction for nonpayment, property destruction, and major lease violations could be filed and processed in days rather than months, the landlords wouldn't have to delve so thoroughly into tenants' backgrounds to screen them. Heck, if that were the case, I'd be renting out my place now, but the legislative hoops make landlording above my risk tolerance so I'll let my condo go for sale and it will probably end up in some big corporate entity that has a much higher appetite for that sort of risk. More than happy to let them deal with that.
    - 7sidedmarble 5y ago
      From a strictly utilitarian point of view (the favorite view of this website), since there's more tenants than landlords out there, shouldn't we err on the side of protecting tenants from abuse rather than the other way around? You can't have it both ways, so you have to do something.
- Mountain_Skies 5y ago
  There are 1.5 million housing units under construction, which is an all-time record. It'll be interesting to see how quickly that get absorbed in a market with rising interest rates and questionable valuations. There appears to be lots of demand but what I'm seeing in my corner of the world is most of the demand is at the lower end of the market, which I'm guessing isn't what is primarily being developed. People moving up does free up properties at lower ends of the market, so in effect, a trickledown effect, but that takes a while to happen. Maybe we're going to see more and more house sharing and renting of individual rooms (legal or not).
  - notch656a 5y ago
    I think a lot of the supply at the low end is irreplaceable, because building codes and regulations have changed significantly over the years. It's effectively illegal to build some of the more affordable buildings in certain jurisdictions.
    - KevinGlass 5y ago
      This is true. I'd estimate at least 70% of all rental unit currently under construction will not be "affordable" for two people working full time for minimum wage. In northern New England it's easily 100% of units. That said all rental projects that I know of in Maine and New Hampshire are all rented before they even finish construction. EDIT: I'd also like to make a point about current regulation and zoning. It's not unusual for a developer to pay around $500,000 or more in state fees, environmental review, and layer time to get a new apartment complex approved. This requires insider connections and specialized knowledge of the municipality if you want it completed in a reasonable time frame. Partially this is because national building codes are more complicated then ever but more often building anything at all requires a zoning exception or amendment. If you pull of the zoning maps for your town or city you'll likely find it riddled with parcels that have been cut out or otherwise exempted from the rest of the zone. This process can be expensive and take years to complete.
      - deleted 5y ago
        [deleted]
- throwawayboise 5y ago
  Most leases are written for 12 months. There is AFAIK no evicition protection once the lease expires, or am I wrong? It seems to me that 12 months is the limit of the landlord's risk.
  - gizmo686 5y ago
    Landlord/tenet law is highly location dependent. Around here (Maryland), landlords are required to offer leases up to 2 years (this might be a county law), although I suspect 12 month leases are still common. At the end of a lease, MD law requires the lease to default into a month-to-month lease. To kick a tenent out without cause, a landlord need only provide 30 days notice. However, if the tenent refuses to vacate, the landlord still needs to go through the eviction process.
- causality0 5y ago
  A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state . Wow that's insane. If I was renting out a property I owned I'd expect to be able to throw someone out within a day after an active refusal to pay rent.
- akhmatova 5y ago
  I don't really see the point of this article, Because you lack empathy and perspective? People can be forced into bankruptcy for all sorts of reasons that are largely beyond their control (such as the example you are implicitly referring to in the article). Doesn't mean they should be homeless (or limited to the most marginal of housing conditions) for the rest of their life. Especially if they have nursed their score back to a reasonable state of health. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state. This seems overdrawn (i.e. out of synch with reality). In the one state for which I am intimately familiar with these proceedings (and another certain very large blue state that I did a fair amount of research on at one point), a properly executed eviction proceeding should take no more than 120 days or so, even assuming delays in the court calendar (except in weird outlier cases like the city can't determine the zoning or protection status of the property, etc). I can imagine there a few states with as grossly dysfunctional (general case) eviction proceeding standards like you describe, but not ... all that many states.
  - 999900000999 5y ago
    Oh, I've been through two evictions, but I can also see landlords aren't charities. If you have a bankruptcy on your credit report, no landlord in their right mind is going to want to rent to you. It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable. Here's the rub, a mom and pop landlord can't have half their tenants not pay rent for 6 months, but Greystone can. And big corporate landlords are more likely to be strict when it comes to renters.
    - akhmatova 5y ago
      It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable. In other words, that "6 to 18 months" number was just basically made up.
      - 999900000999 5y ago
        Let's just say I've some personal experience in this... What's their to debate, COVID had 2 year long eviction moratoriums in some parts
- jlmorton 5y ago
  > it's well known bankruptcies stay on your credit report for 10 years. But it's less well-known that Chapter 13 bankruptcies stay on your credit report for 7 years, which had already passed. Chapter 13 represents about one-third of all bankruptcies. Chapter 13 is less common, because it's more difficult to go through, and takes longer, but it has substantial benefits. The article doesn't say what chapter she filed under, but it's easily plausible that it was Chapter 13, and the bankruptcy had already fallen off her credit report.
- IncRnd 5y ago
  > it's well known bankruptcies stay on your credit report for 10 years. That isn't exactly true! Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years. [1] Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don't own a home and have a limited income. Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property (including secured assets like your home and car) if you successfully complete a court-mandated repayment plan that lasts between three and five years. [1] https://www.experian.com/blogs/ask-experian/bankruptcy-chapter-7-vs-chapter-13/ https://www.experian.com/blogs/ask-experian/bankruptcy-chapt...
- dd82 5y ago
  https://en.wikipedia.org/wiki/Social_Credit_System https://en.wikipedia.org/wiki/Social_Credit_System the US is doing a much shadowier version of china's social credit system. At least with china, its up front and in your face, with this it is much more background and insidious.
Not_John 5y ago
The Headline is in Germany with the "Schufa" literally already the case. What makes it worse, is that you cant even open a Bankaccount with a bad Score.
- dgellow 5y ago
  Yeah, the Schufa is really a horrible system. https://en.wikipedia.org/wiki/Schufa https://en.wikipedia.org/wiki/Schufa It’s proprietary, cost money, is almost impossible to avoid if you want to rent an apartment in Germany. And they have been found to have A LOT of incomplete, outdated, or wrong data.
legitster 5y ago
> experts warn that algorithms could introduce racial or other illegal biases There was literally no expert quoted in the article who asserted such a thing. > “It’s kind of chaos,” said Ariel Nelson, a staff attorney at the National Consumer Law Center. “It’s really hard to figure out if you were rejected, why was it rejected. If it’s something you can fix or if it’s an error.” The rightful criticism is that these systems are opaque and Kafkaesque. One of the few benefits of them is that they are going to be less biased than human review. But I guess it's too boring to assert that something is just generally unfair when you can lazily shoehorn in that it must be racist.
- notch656a 5y ago
  The racist angle was introduced because it's the only plausible nexus by which this practice could be illegal.
- matwood 5y ago
  > One of the few benefits of them is that they are going to be less biased than human review. This isn't necessarily true. The factors used to drive the algorithms are selected by humans. And from those factors it's not always clear if they end up discriminatory. This is exactly why the systems remain opaque.
- omegalulw 5y ago
  >> experts warn that algorithms could introduce racial or other illegal biases > There was literally no expert quoted in the article who asserted such a thing. This is exceedingly harsh. Look at regulation on the credit card industry on what data you can and cannot use to make credit decisions. Algorithms can certainly have bias - that's not a disputed fact - and without careful screening of the data and the models you will quite likely have biases. So the article isn't unfair in making that statement.
  - UnpossibleJim 5y ago
    Algorithms have bias', sure. (1) Do they have more or less bias than the humans performing the current review process? (2) Is there a way to make their decision making process less opaque than it is now, to reduce the level of bias in their decision making process? - I know there has been some work done in this area (a) though it isn't as fast as many would like to see. (a) https://link.springer.com/article/10.1007/s11948-020-00276-4 https://link.springer.com/article/10.1007/s11948-020-00276-4
parkingrift 5y ago
>Dunn said some of the scoring models he’s seen while litigating cases on behalf of tenants are crude, giving so much weight to factors like eviction, criminal history or debt that a person whose record includes even one of those things would get a negative recommendation. I agree with the issues of transparency, but not with the models themselves. I absolutely would not rent property to someone who has a recent criminal record, a recent eviction, or a risky credit profile. Tough eviction laws make it too risky to select the wrong tenant. It could take months to remove a non-paying tenant in some cities.
- Consultant32452 5y ago
  Don't forget we now have to "price in" occasional years long eviction moratoriums.
  - tacLog 5y ago
    Do you think this tool will be used again for less urgent issues than Covid was?
    - Consultant32452 5y ago
      I'm not sure how to answer your question because it seems obvious to me that Covid was not the cause of the moratoriums.
      - tacLog 5y ago
        I am completely at a loss to what your referring to then. I know of eviction moratoriums that occurred after covid. It was sold as a way to avoid a massive surge in displaced people from job loss. At the time I thought it was strange that this was the best solution because as you said it put the cost on landlords which in my opinion hurts smaller landlords the most. I don't really see what else could have been the cause but I guess I will rephrase: - Why do you think this tool was used if not for Covid? (It was as least sold to the public that way right) - Do you think now that it's been done once that it will happen again?
morpheuskafka 5y ago
Is anyone else concerned that the screening report just has yes/no for existence of landlord-tenant court records? Regardless of whether the tenant won (or even started, it could be the landlord getting sued for security deposit for example) the case.
- lookalike74 5y ago
  The yes/no in some cases could allow fixed-income people to be approved when they are short of the required income or credit history because they've never had a rental problem. A lot of fixed-income seniors pay a large portion of their income to rent but have done so reliably for decades, for example.
  - dont__panic 5y ago
    That would also be addressed by a more detailed explanation of court records, or a binary yes/no of whether the tenant was ultimately found guilty of a transgression against previous landlords, no? The previous comment is pointing out that this could be a problem if you've been sued by an unscrupulous landlord in the past. That problem exists for fixed income people as well.
    - kragen 5y ago
      BTW, you were right that Pebble used those memory LCDs in their smartwatches. Unfortunately I can't reply to your comment from that time. Thanks for letting me know!
  - kazinator 5y ago
    The point is that this yes/no datum is going to be interpreted as a black stain, regardless of what it means. A landlord reviewing 50 applications for a place isn't going to go into the particulars. Depending on the landlord's approach, anything with a yes won't make the short list. Credit reports should not have suspicious stains whose meaning could be that there is in fact nothing wrong (there was a dispute which was caused by someone else, and resolved in the applicant's favor).
mrfusion 5y ago
The FCRA was designed to prevent this kind of thing. I wonder how they get around it?
- g051051 5y ago
  The FCRA defines how a credit report can be used, and rental decisions are considered a "permissible purpose".
  - mrfusion 5y ago
    It does a whole lot more than that, brother. Consumers are allowed to correct inaccuracies for one. https://en.m.wikipedia.org/wiki/Fair_Credit_Reporting_Act https://en.m.wikipedia.org/wiki/Fair_Credit_Reporting_Act
    - g051051 5y ago
      I'm not sure what it has to do with your question, which was "The FCRA was designed to prevent this kind of thing. I wonder how they get around it?". Landlords have permissible purpose to check your credit report, so they aren't "getting around it".
- LorenPechtel 5y ago
  The problem is that these guys aren't covered by the FCRA. That's what we really need to do--extend the FCRA to cover all companies that gather external data to make decisions that are important to the person. Apply the same standards to all forms of background check--it waddles and quacks, the FCRA applies. I would also change the once-a-year check to say once-a-day. The fundamental problem is that the economics of all background-check companies are skewed towards false denials. The companies are happy to have dodged a bullet (bad renter, bad job applicant etc), nothing tells them that the bullet wasn't real. (And what of those of us whose backgrounds aren't exactly verifiable? I have more than 20 years of employment at companies that no longer exist.)
  - astura 5y ago
diebeforei485 5y ago
Is there some CCPA-style remedy where you can get every piece of information that went into your score?
deleted 5y ago
[deleted]
rootusrootus 5y ago
Another problem that only exists due to lack of competition. Landlords hold the upper hand and can afford to be picky. We could collectively decide to solve this, but probably will not.
- EricE 5y ago
  Want to know how to never have to deal with a landlord? Own your own property! Also if you are concerned about affordable housing, I hope you paid attention to the line in the article that talked about big business moving into the rental scene buying up properties and charging more for rent than mom and pop landlords. Want to know what caused the largest shift of property ownership from small landlords to big conglomerates? All the COVID evection restrictions. We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
  - rootusrootus 5y ago
    > Want to know how to never have to deal with a landlord? Own your own property! I feel sympathetic with the folks who are trying to buy into the housing market now. I could not reasonably afford my own house if I were buying it today, and I make pretty good money. There will be a reckoning at some point, this obviously cannot continue indefinitely. > We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come. Yet another example of the road to hell being paved with good intentions. "Seemed like a good idea at the time!"
    - __turbobrew__ 5y ago
      There will be a reckoning, the question is how long the market can stay irrational. I want to purchase a property to raise children in, but unfortunately my partner and I don’t necessarily have the luxury of waiting a long time to have kids for obvious biological reasons. In my country the majority (~60%) of citizens own their own home so the majority of people are riding the gravy train of skyrocketing prices while the others get priced out of home ownership. The reckoning may not happen until a sizeable majority is priced out of home ownership, and that may not happen for a decade. On the global stage I know I am very lucky when it comes to my lifestyle, but it is hard not to feel animosity for the generations which came before you and had it so easy when it comes to property ownership. The same owners who are now benefiting from your inability to afford a stable place to raise a family. I firmly believe that the new Singapore model for taxing non-primary residences is necessary to level the playing field between those who just want to have somewhere to raise a family and those who have billions in their pockets. I don’t believe my country has the will to enact such drastic changes so I am assuming the unaffordability crisis will go on for much longer than necessary.
atlgator 5y ago
What I don’t like about this type of journalism is how they use one instance to set up a boogeyman that they want to scare all of society with. The woman had a 632 credit score in 2021. The average American FICO score was 714 at the same time. She was well below average at a time when housing demands are at all time highs. https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/ https://www.experian.com/blogs/ask-experian/what-is-the-aver...
- mistrial9 5y ago
  coincidentally, as far as I know, US Court precedent works exactly the same way, in that a single, real world case is the setting for deciding the applicability, reasonableness and effectiveness of laws on the books, not the "spirit and principle in general" .. IANL
  - atlgator 5y ago
    Even a single court case is a complex evaluation of current law and precedent to that point. This on the other hand is a straw man fallacy.
  - gizmo686 5y ago
    Kind of. Most court cases do not set any precedent. If you think the judge made a legal mistake in your case, you can appeal regarding that specific legal question. The appalete court can then issue a ruling on that specific question of law. If they find the lower court was in error, they would typically send it back to the lower court to redo under the new guidance. Sometimes the specifics of the case do interfere with the appelet court's judgement, but the entire system is set up to minimize that.
- jimmaswell 5y ago
  I've never missed a payment, have over 6 years of on time payments, never even carried a balance on a card, and never been denied an application, yet my score has dipped as low as 640 just because of a "high" amount of credit checks, because I like to take advantage of "spend $1000 on our card and get $200" promotions that come in the mail. 630 doesn't necessarily mean anything bad at all.
lostgame 5y ago
It should obviously be illegal - preferably criminal - to check a credit score for a place to live, anyway - because a credit score, probably at least half the time - has little to no impact on how reliable of an individual you are financially. I live in Canada, where health care is covered, but dental isn’t. I had an injury several years ago which effectively destroyed many of my teeth, and ended up more than $15,000 into debt over it. I couldn’t make my payments on time for probably a couple years, and even though I finally managed to pay it off, it’s a black spot on my credit history for years to come - through absolutely no fault of my own. This is infinitely worse in the USA, where the pathetic government that promises ‘freedom’ somehow doesn’t get that universal health care is a huge part of that. I have family in the USA who got cancer. Due to the absolutely bullshit health care system there, they are completely, utterly, financially devastated. This family member had to be stopped from committing suicide when they found out just how much it would cost to save their life. That they would have to declare bankruptcy. That their credit score, and anything they'd ever need to do with money in the rest of their life - was completely gone. It’s literally why I don’t live in the USA anymore. Scared me shitless. You know what’s way - way worse than getting cancer? Having to pay more than you could ever possibly afford for getting cancer. Good luck getting a house after that, thanks to this bullshit. According to credit scores - you should be held personally responsible for the fact that you got that disease. Literally - how dare you get cancer. Enjoy having a shit credit score for the rest of however long you have to live. The fact is - people need places to live, and if people have poor credit - especially if it’s of no fault of their own, but due to the bullshit system we live in that has no room for genuine accidents - how the hell are these people ever supposed to find a place to live? I had to go out of my way - and pretty much pay extra - to find a landlady here in Toronto even willing to give me enough understanding to rent a place - and I make about $100k CDN a year. I had to explain the whole situation, come up with documents to prove that’s what actually happened, and even then I was lucky to get a place to rent. I can’t imagine what it’s like for people who might have half or less of my income and poor credit through no fault of their own but are looking for a place to live. Fuck the credit score system. It is an abhorrent human rights issue - is simply disgusting and disturbing - and only serves the rich. A credit score does not take into account for humanness. It’s the nuke of weaponized capitalism, yet another tool to keep the rich more rich and the poor more poor. May the greedy miscreants who developed and enforce this wicked system rot in a special kind of hell.
xyst 5y ago
one of these days, we are going to look back on the absurdity of this current system. Just like we looked back on slavery. Very basic housing should be free. Single payer healthcare should be the standard. Basic income should be provided. As we move towards a more automated society, there are going to be a ton of angry unemployed people with nothing to do but focus their anger on something else.
- lolsal 5y ago
  > Very basic housing should be free. Please publish where you have developed and built all this free housing so that everyone that wants to live there can enjoy this right.
  - tacLog 5y ago
    I mean your are assuming that with free housing you retain a right to live where you want to live. I am NOT saying we should build this free housing in one area and stick people there: (see the many failed public housing attempts) But there are more options available than everyone getting free housing in the bay area, CA.
    - lolsal 5y ago
      > I mean your are assuming that with free housing you retain a right to live where you want to live. I'm not sure why you think that; I never said that anywhere. > But there are more options available than everyone getting free housing in the bay area, CA. Cool, are you going to volunteer to leave your hometown and family to live in this free basic housing? Plenty of land in west Texas if you need space.
  - trasz 5y ago
    It’s called social housing and is available in many countries, such as UK. It’s often not literally free, but several times cheaper than market prices.
    - lolsal 5y ago
prirun 5y ago
My auto+homeowner insurance recently increased because they said my credit score was lower this renewal. I pay my auto insurance for the whole year in advance, so why do they give a shit what my credit score is? It's just another gimmick excuse to charge more money. I'm guessing the excuse is necessary to bypass insurance regulations or something.
- HideousKojima 5y ago
  Given the risk-taking activities of the poor vs. the rich, I don't doubt that some actuarial table shows that lower credit scores correlate with high risk profiles for liability insurance. Whether or not that's moral is another matter.
  - nostromo 5y ago
    Just wait until they disallow using credit scores for determining who is credit worthy.
- FireBeyond 5y ago
  Thankfully my state (and others are joining) disallow the use of credit scores for insurance. Which is good for me - my credit score dropped by nearly ~80 points when I bought a home last year, and 10 months later has only recovered 40 points.
- mint2 5y ago
  Unfortunately any individual company is not in a position to stop using credit, the only way to stop that practice is for the state regulators to step in due to public pressure. Do your civic duty as you see fit. A company cannot unilaterally drop credit as it will open them up to adverse section.
- astura 5y ago
  This has actually nothing to do with your premium payment, it's an underwriting risk factor. Research has shown that people with high credit scores make less insurance claims. People who make less insurance claims pay less for insurance. In other words, credit score is a proxy for conscientiousness. Some people don't like that so a few states have outlawed using credit score in underwriting. Hawaii and Massachusetts specifically IIRC.
jvdvegt 5y ago
TIL credit score is a real thing in a Western country - I always figured it was some thing hypothetical. Looks scarily too familiar to the Social score from some Black Mirror episode, or the alleged Chinese system if you ask me.
- tacLog 5y ago
  As someone from a Western country, what replaces it? How do you buy a car on a loan for example? It's not perfect but unlike both your examples it isn't based on things that could be consider political. You can't lower your credit score by attending a protest for example. Or posting things for or against causes on the internet. I am just honestly wondering what else is our there? It has always seemed like a tool that can be used by both individuals and lenders.
  - hocuspocus 5y ago
    Plenty of European countries don't have credit scores. A car loan is collateralized so I don't really see what's complicated.
    - MaxHoppersGhost 5y ago
      The cost of repossessing a car isn’t zero, and even finding the car can be hard. What if the car is trashed when you repossess it? Say they wrecked it and don’t have insurance? This isn’t an uncommon scenario.
      - hocuspocus 5y ago
        No insurance = no registration = no plates. That's a pretty serious offense and it's extremely uncommon over here. Sure, repossession can be costly but debt collection agencies will make your life hell very quickly, it's not something you can drag for years without big consequences.
  - PeterisP 5y ago
    At my home the approach is a central registry of defaults that can be accessed with your permission (which is required by some but not all lenders to evaluate you). It's kind of an extreme version of a credit score, where everyone who has never defaulted - or where the cause of default wasn't their fault e.g. identity fraud - has a perfect "credit score". The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.
BXLE_1-1-BitIs1 5y ago
The ideal tenant candidate already owns a house and doesn't need to rent. Having been both landlord and tenant at various stages of my life, my first law of landlording is that trouble from tenants varies inversely with the square of the rent.
- drBonkers 5y ago
  tenant_trouble ∝ 1/rent²
  - deleted 5y ago
    [deleted]
- sbierwagen 5y ago
  Annoying "well actually" counterexample: my rent hasn't kept up with inflation, and I'm doing everything possible to avoid coming to the notice of my landlord. A call about a leaky faucet could cost me an additional six thousand dollars a year.
  - KeepFlying 5y ago
    You've described my situation too, though it's not a rent increase I'm worried about, it's the installation of a mandatory smart lock that I've somehow avoided for a few months now.
    - vsareto 5y ago
      I signed a lease which specifically stated that I was responsible for providing the internet for the smart locks and devices within the apartment. I brought this up to them, but they said "Nah, you don't have to do that" and wouldn't remove it from the lease. They were correct though: everything functioned before I had internet and I never had to join them to my network, but it made me think about the rest of the stuff in the very legally binding lease that worked similarly.
    - safsfaas 5y ago
jijji 5y ago
I have a lot of rentals and the big things that I look for as a landlord is criminal history and make decisions based mostly on that. Credit score doesnt come into the calculation because you have to assume most renters dont have a great credit score. Making sure the person also has a stable income is also part of it.
gwbas1c 5y ago
> But her tenant score was too low for her to rent an apartment without paying an elevated deposit ... never missing a rent payment before moving out early due to the pandemic I know the article didn't explain if she asked to leave early; but if you have a lease, you can't just "up and leave" when you want. That requires negotiating with the landlord.
- Gigachad 5y ago
  You can in every place I have seen. You are just up for any costs involved in getting a new tenant. In the current market that's close to nothing since someone else will be in the week you move out.
gwbas1c 5y ago
I've heard so many landlord horror stories, I can understand why landlords want something like this. I can also understand why big business is becoming more and more common as landlords; when an individual rents out one or two properties the risk of a bad tenant is far too high. FWIW: I always preferred to rent from professional landlords who owned a 4-5 complexes. Small-time landlords were always too amateur; and large corporate landlords delivered poor value. (IE, I lived in a corporate "luxury" apartment that had junky appliances.)
hn_throwaway_99 5y ago
While I realize this is a personal anecdote, the pandemic made starkly clear that the government will basically commandeer your property and force you to let tenants live there, so with that added risk it's no surprise landlords are being extra careful who they rent to. I had a family member rent to someone in Feb of 2020. He paid one month of rent, and then nothing until the government finally let the eviction go through in Dec 2021. I don't entirely blame.the government, in that if my family member did even basic due diligence they would have seen how much of a grifter this guy was, with previous bankruptcies and other recent evictions. Still, in the past, when you made a mistake and got a bad tenant, the option was eviction. And while the government largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees. As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
- nostromo 5y ago
  This happened to me in Seattle. I have a duplex and my renter just stopped paying. It's a joke that this had anything to do with Covid - the job market is tighter than it's ever been. I will never again take a chance on a renter in this city. If you have anything wrong with your credit or income history -- I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government. The other thing that's happening: people like me rarely advertise our units. Instead we look through trusted networks -- friends, family, and co-workers. If you don't have a connection, you can't find these units at all.
  - teachrdan 5y ago
    > I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government. I would point out that if people in your position stopped buying rental units and invested your money elsewhere, there would be more housing on the market for renters looking to own their own home.
ganzuul 5y ago
It would be nice if we did away with landlords entirely and enabled people to come out of poverty somehow.
noduerme 5y ago
So here in Oregon, and more so in Portland, there have been some really radical laws passed in the last couple years. You can no longer evict people for cause without offering up to $4k in "relocation cost", and you can no longer see nor use history of felonies including sex offenses outside the past 7 or 8 years to screen tenants. You have to announce the listing publicly and take anyone who says they can pay on a first come, first served basis. And instead of showing 3x the rent as income, you can now only exclude them if they show less than 2x. So essentially the first meth addicted child molester who scraped by 2x your rental price in the last month can move in and never be evicted. It's really great how NPR and ProPublica keep banging on about how unfair it is for anyone who owns anything to request anything of the people they rent to. What about how unfair it is to people like me who worked their asses off to buy a house and want to take care of it? It took me 25 years of work to afford a home. No 22 year old anarchist, bless your soul because I was one, is going to explain to me why I don't deserve it. It's the only property I own. This is why I'm just allowing a friend to live for free in my house while I'm out of the country for the next year, and soaking up the lost rent rather than soaking up potential legal bills and damage. But if things continue this way, I'll sell it to a willing idiot, and everyone here who advocated for this communist shit can enjoy the hell hole they've created for themselves.
- blindmute 5y ago
  Because people vote for those laws. I can only hope that if and when it becomes too much for you, you don't vote that way in your new locale.
josephd79 5y ago
How is this even legal? This tenant screening report could easily allow someone to discriminate certain individuals. I'm assuming when you fill out a rental application its in the fine print but who or what regulates what data the use?
Helen00 5y ago
juanani 5y ago
Jaradkurtz0 5y ago
glencolemann 5y ago

211 points by danso 5y ago

ouid 5y ago

alexklark 5y ago
Well, in the world of empty houses and homeless people, who cares if some more losers wont get a flat, or pay their whole salary to avoid eviction? Home and rent prices should go up, and people should work harder and longer to afford luxury of having roof over head.

I don't really see the point of this article, it's well known bankruptcies stay on your credit report for 10 years. With the recent rent moratoriums, I expect landlords to get even harsher. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state . If this person went and filed for a second bankruptcy, they could then delay the eviction by years. The bigger issue of course is we haven't built up enough new housing over the last 40 years, you want there to be so much available housing landlords can't be selective. They have to take the risk of losing a bit of money, because they're going to lose an absolute ton if they let their units remain vacant.

notch656a 5y ago
Yep, easy come easy go. The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency.
- kylehotchkiss 5y ago
  That would very quickly escalate the already very bad homelessness crisis in many parts of the country. Some levels of tenant protection are a way society can help their citizens get back on feet after a difficult time, which almost every person will encounter. Freeloaders will eventually get kicked out.
  - notch656a 5y ago
    I'd argue the effect may be the opposite. Tenant protections lead to homelessness by forcing landlords to be selective against vulnerable peoples, making it harder to get back on their feet after difficult times. Risk in renting to these people is greatly reduced if you can toss them out as soon as they stop paying.
    - otterley 5y ago
      Either way, you’re making someone homeless, which is an intractable problem as long as the housing demand exceeds supply. The only change being made is the criteria for who gets to suffer.
      - erik_seaberg 5y ago
        Penalizing every innocent potential renter who’s more likely to default on a lease is worse than only penalizing renters who actually do.
  - endisneigh 5y ago
    It’s a complicated issue - my anecdote is that any risk will ultimately be manifested in the form of more selectivity on the landlords end.
- LorenPechtel 5y ago
  Which would result in more improper evictions. As it is we have already seen multiple examples of landlords losing checks so they can evict and rent to someone else at a higher rate. I've wondered about taking a different approach: The landlord is free to evict on the day of delinquency, but must move the possessions to a storage facility (paying a month's rent at that time) and they must post a substantial bond. If the tenant shows the eviction was improper they get the bond + costs. (And I would apply the same thing to foreclosures.) Instead of a long process of showing that they are acting properly they are putting up a substantial financial promise that they are acting properly. Make improper actions a costly mistake and there will be few of them.
  - oh_sigh 5y ago
    How would that process help in the "lost check" scenario you mention?
    - jfk13 5y ago
      Somewhat of an aside, but as a non-American, I find it quite weird that it seems to be common to pay rent with a monthly check. Every place I've rented, I've paid automatically by standing order. (Oh, except in a couple of third-world countries, where cash was the norm.)
      - MaysonL 5y ago
        The building I live in has an online payment option, but the only payment option that the organization doing the collection takes is PayPal. Fuck PayPal, I can go to the bank and get a check (I haven't personally written a check for decades).
    - LorenPechtel 5y ago
      It wouldn't, but it would help with other bad evictions.
- vkou 5y ago
  If you're looking to increase the number of temporarily homeless people, this sounds like a great approach. Unfortunately, temporarily homeless people have a habit of turning into chronic homeless people. And living in a city that's full of chronic homeless people, I don't think we need more. Your comfort and convenience as a landlord does not rank higher than my desire to not step over human shit on my way to work.
  - notch656a 5y ago
    Raising regulatory barriers increases cost of housing. Increased cost of housing disproportionately effects those who have less money. Eviction protections are incredibly harmful to homeless as it makes it can make it risky (costly) to rent to homeless, taking housing even further out of reach. Homeless become even less competitive renters. Your comfort and convenience to have the option not to pay a landlord does not rank higher than the desire of homeless to have better access to housing. Places with homeless problems badly need to remove these protections from renters.
    - vkou 5y ago
      Except it doesn't work the way you describe, because all it does is determine the quality of tenant that gets to stay in a housing unit in a shortage. Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous - doubly and triply so if you are the kind of marginal person that gets kicked out of their home. It is incredibly disruptive to their life - much moreso than for someone in a stable situation not being able to find a different place to live. Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious. If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum. If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this. Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer. Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
- HWR_14 5y ago
  > The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency. The quickest way to get landlords to become less selective is to say "any vacant apartment/home not occupied by at least one fulltime resident can be claimed by someone homeless as of [date]." You'd have landlords begging people to sign leases (and people would because then they would get a sure nice apartment as opposed to a lottery for one of the few ones left). Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice.
  - notch656a 5y ago
    >Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice. What an entitled viewpoint. It's not their home; an entirely different person owns it and they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it. The person having their home ripped away at a moment's notice is the landlord.
    - HWR_14 5y ago
      > It's not their home; an entirely different person owns it It's not their house. It certainly is their home. I would prefer those be the same person as often as possible to align incentives. > they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract. It's not uncommon for landlords to be the first party to breach the contract either intentionally (e.g. losing checks to move a tenant at below market rates out), neglectfully (e.g. ignoring upkeep or repairs) or unintentionally (e.g. entering at will). Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved. > The person having their home ripped away at a moment's notice is the landlord. Unless the landlord lives there, the landlord's home is unrelated to the property.
      - notch656a 5y ago
danso 5y ago
The article isn't just about bankruptcies. It's about a tenant scoring system that has as much power over your life as the credit scoring system, albeit with far less regulation and consumer protections: > Tenant screening companies compile information beyond what’s in renters’ credit reports, including criminal and eviction filings. They say this data helps give landlords a better idea of who will pay on time and who will be a good tenant. The firms typically assign applicants scores or provide landlords a yes-or-no recommendation. > A ProPublica review found that such ratings have come to serve as shadow credit scores for renters. But compared to credit reporting, tenant screening is less regulated and offers fewer consumer protections — which can have dire consequences for applicants trying to secure housing.
- Mountain_Skies 5y ago
  Selecting tenants is a legal minefield. As a result, many landlords find it safer to offload that decision to a third party. It sounds like these third-party rating services, including their "rent, don't rent" decisions, are filling a need but are ahead of legislation to curb some of their excesses.
- ilikehurdles 5y ago
  If eviction for nonpayment, property destruction, and major lease violations could be filed and processed in days rather than months, the landlords wouldn't have to delve so thoroughly into tenants' backgrounds to screen them. Heck, if that were the case, I'd be renting out my place now, but the legislative hoops make landlording above my risk tolerance so I'll let my condo go for sale and it will probably end up in some big corporate entity that has a much higher appetite for that sort of risk. More than happy to let them deal with that.
  - 7sidedmarble 5y ago
    From a strictly utilitarian point of view (the favorite view of this website), since there's more tenants than landlords out there, shouldn't we err on the side of protecting tenants from abuse rather than the other way around? You can't have it both ways, so you have to do something.
Mountain_Skies 5y ago
There are 1.5 million housing units under construction, which is an all-time record. It'll be interesting to see how quickly that get absorbed in a market with rising interest rates and questionable valuations. There appears to be lots of demand but what I'm seeing in my corner of the world is most of the demand is at the lower end of the market, which I'm guessing isn't what is primarily being developed. People moving up does free up properties at lower ends of the market, so in effect, a trickledown effect, but that takes a while to happen. Maybe we're going to see more and more house sharing and renting of individual rooms (legal or not).
- notch656a 5y ago
  I think a lot of the supply at the low end is irreplaceable, because building codes and regulations have changed significantly over the years. It's effectively illegal to build some of the more affordable buildings in certain jurisdictions.
  - KevinGlass 5y ago
    This is true. I'd estimate at least 70% of all rental unit currently under construction will not be "affordable" for two people working full time for minimum wage. In northern New England it's easily 100% of units. That said all rental projects that I know of in Maine and New Hampshire are all rented before they even finish construction. EDIT: I'd also like to make a point about current regulation and zoning. It's not unusual for a developer to pay around $500,000 or more in state fees, environmental review, and layer time to get a new apartment complex approved. This requires insider connections and specialized knowledge of the municipality if you want it completed in a reasonable time frame. Partially this is because national building codes are more complicated then ever but more often building anything at all requires a zoning exception or amendment. If you pull of the zoning maps for your town or city you'll likely find it riddled with parcels that have been cut out or otherwise exempted from the rest of the zone. This process can be expensive and take years to complete.
    - deleted 5y ago
      [deleted]
throwawayboise 5y ago
Most leases are written for 12 months. There is AFAIK no evicition protection once the lease expires, or am I wrong? It seems to me that 12 months is the limit of the landlord's risk.
- gizmo686 5y ago
  Landlord/tenet law is highly location dependent. Around here (Maryland), landlords are required to offer leases up to 2 years (this might be a county law), although I suspect 12 month leases are still common. At the end of a lease, MD law requires the lease to default into a month-to-month lease. To kick a tenent out without cause, a landlord need only provide 30 days notice. However, if the tenent refuses to vacate, the landlord still needs to go through the eviction process.
causality0 5y ago
A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state . Wow that's insane. If I was renting out a property I owned I'd expect to be able to throw someone out within a day after an active refusal to pay rent.
akhmatova 5y ago
I don't really see the point of this article, Because you lack empathy and perspective? People can be forced into bankruptcy for all sorts of reasons that are largely beyond their control (such as the example you are implicitly referring to in the article). Doesn't mean they should be homeless (or limited to the most marginal of housing conditions) for the rest of their life. Especially if they have nursed their score back to a reasonable state of health. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state. This seems overdrawn (i.e. out of synch with reality). In the one state for which I am intimately familiar with these proceedings (and another certain very large blue state that I did a fair amount of research on at one point), a properly executed eviction proceeding should take no more than 120 days or so, even assuming delays in the court calendar (except in weird outlier cases like the city can't determine the zoning or protection status of the property, etc). I can imagine there a few states with as grossly dysfunctional (general case) eviction proceeding standards like you describe, but not ... all that many states.
- 999900000999 5y ago
  Oh, I've been through two evictions, but I can also see landlords aren't charities. If you have a bankruptcy on your credit report, no landlord in their right mind is going to want to rent to you. It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable. Here's the rub, a mom and pop landlord can't have half their tenants not pay rent for 6 months, but Greystone can. And big corporate landlords are more likely to be strict when it comes to renters.
  - akhmatova 5y ago
    It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable. In other words, that "6 to 18 months" number was just basically made up.
    - 999900000999 5y ago
      Let's just say I've some personal experience in this... What's their to debate, COVID had 2 year long eviction moratoriums in some parts
jlmorton 5y ago
> it's well known bankruptcies stay on your credit report for 10 years. But it's less well-known that Chapter 13 bankruptcies stay on your credit report for 7 years, which had already passed. Chapter 13 represents about one-third of all bankruptcies. Chapter 13 is less common, because it's more difficult to go through, and takes longer, but it has substantial benefits. The article doesn't say what chapter she filed under, but it's easily plausible that it was Chapter 13, and the bankruptcy had already fallen off her credit report.
IncRnd 5y ago
> it's well known bankruptcies stay on your credit report for 10 years. That isn't exactly true! Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years. [1] Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don't own a home and have a limited income. Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property (including secured assets like your home and car) if you successfully complete a court-mandated repayment plan that lasts between three and five years. [1] https://www.experian.com/blogs/ask-experian/bankruptcy-chapter-7-vs-chapter-13/ https://www.experian.com/blogs/ask-experian/bankruptcy-chapt...
dd82 5y ago
https://en.wikipedia.org/wiki/Social_Credit_System https://en.wikipedia.org/wiki/Social_Credit_System the US is doing a much shadowier version of china's social credit system. At least with china, its up front and in your face, with this it is much more background and insidious.

Not_John 5y ago

The Headline is in Germany with the "Schufa" literally already the case. What makes it worse, is that you cant even open a Bankaccount with a bad Score.

dgellow 5y ago
Yeah, the Schufa is really a horrible system. https://en.wikipedia.org/wiki/Schufa https://en.wikipedia.org/wiki/Schufa It’s proprietary, cost money, is almost impossible to avoid if you want to rent an apartment in Germany. And they have been found to have A LOT of incomplete, outdated, or wrong data.

legitster 5y ago

> experts warn that algorithms could introduce racial or other illegal biases There was literally no expert quoted in the article who asserted such a thing. > “It’s kind of chaos,” said Ariel Nelson, a staff attorney at the National Consumer Law Center. “It’s really hard to figure out if you were rejected, why was it rejected. If it’s something you can fix or if it’s an error.” The rightful criticism is that these systems are opaque and Kafkaesque. One of the few benefits of them is that they are going to be less biased than human review. But I guess it's too boring to assert that something is just generally unfair when you can lazily shoehorn in that it must be racist.

notch656a 5y ago
The racist angle was introduced because it's the only plausible nexus by which this practice could be illegal.
matwood 5y ago
> One of the few benefits of them is that they are going to be less biased than human review. This isn't necessarily true. The factors used to drive the algorithms are selected by humans. And from those factors it's not always clear if they end up discriminatory. This is exactly why the systems remain opaque.
omegalulw 5y ago
>> experts warn that algorithms could introduce racial or other illegal biases > There was literally no expert quoted in the article who asserted such a thing. This is exceedingly harsh. Look at regulation on the credit card industry on what data you can and cannot use to make credit decisions. Algorithms can certainly have bias - that's not a disputed fact - and without careful screening of the data and the models you will quite likely have biases. So the article isn't unfair in making that statement.
- UnpossibleJim 5y ago
  Algorithms have bias', sure. (1) Do they have more or less bias than the humans performing the current review process? (2) Is there a way to make their decision making process less opaque than it is now, to reduce the level of bias in their decision making process? - I know there has been some work done in this area (a) though it isn't as fast as many would like to see. (a) https://link.springer.com/article/10.1007/s11948-020-00276-4 https://link.springer.com/article/10.1007/s11948-020-00276-4

parkingrift 5y ago

>Dunn said some of the scoring models he’s seen while litigating cases on behalf of tenants are crude, giving so much weight to factors like eviction, criminal history or debt that a person whose record includes even one of those things would get a negative recommendation. I agree with the issues of transparency, but not with the models themselves. I absolutely would not rent property to someone who has a recent criminal record, a recent eviction, or a risky credit profile. Tough eviction laws make it too risky to select the wrong tenant. It could take months to remove a non-paying tenant in some cities.

Consultant32452 5y ago
Don't forget we now have to "price in" occasional years long eviction moratoriums.
- tacLog 5y ago
  Do you think this tool will be used again for less urgent issues than Covid was?
  - Consultant32452 5y ago
    I'm not sure how to answer your question because it seems obvious to me that Covid was not the cause of the moratoriums.
    - tacLog 5y ago
      I am completely at a loss to what your referring to then. I know of eviction moratoriums that occurred after covid. It was sold as a way to avoid a massive surge in displaced people from job loss. At the time I thought it was strange that this was the best solution because as you said it put the cost on landlords which in my opinion hurts smaller landlords the most. I don't really see what else could have been the cause but I guess I will rephrase: - Why do you think this tool was used if not for Covid? (It was as least sold to the public that way right) - Do you think now that it's been done once that it will happen again?

morpheuskafka 5y ago

Is anyone else concerned that the screening report just has yes/no for existence of landlord-tenant court records? Regardless of whether the tenant won (or even started, it could be the landlord getting sued for security deposit for example) the case.

lookalike74 5y ago
The yes/no in some cases could allow fixed-income people to be approved when they are short of the required income or credit history because they've never had a rental problem. A lot of fixed-income seniors pay a large portion of their income to rent but have done so reliably for decades, for example.
- dont__panic 5y ago
  That would also be addressed by a more detailed explanation of court records, or a binary yes/no of whether the tenant was ultimately found guilty of a transgression against previous landlords, no? The previous comment is pointing out that this could be a problem if you've been sued by an unscrupulous landlord in the past. That problem exists for fixed income people as well.
  - kragen 5y ago
    BTW, you were right that Pebble used those memory LCDs in their smartwatches. Unfortunately I can't reply to your comment from that time. Thanks for letting me know!
- kazinator 5y ago
  The point is that this yes/no datum is going to be interpreted as a black stain, regardless of what it means. A landlord reviewing 50 applications for a place isn't going to go into the particulars. Depending on the landlord's approach, anything with a yes won't make the short list. Credit reports should not have suspicious stains whose meaning could be that there is in fact nothing wrong (there was a dispute which was caused by someone else, and resolved in the applicant's favor).

mrfusion 5y ago

The FCRA was designed to prevent this kind of thing. I wonder how they get around it?

g051051 5y ago
The FCRA defines how a credit report can be used, and rental decisions are considered a "permissible purpose".
- mrfusion 5y ago
  It does a whole lot more than that, brother. Consumers are allowed to correct inaccuracies for one. https://en.m.wikipedia.org/wiki/Fair_Credit_Reporting_Act https://en.m.wikipedia.org/wiki/Fair_Credit_Reporting_Act
  - g051051 5y ago
    I'm not sure what it has to do with your question, which was "The FCRA was designed to prevent this kind of thing. I wonder how they get around it?". Landlords have permissible purpose to check your credit report, so they aren't "getting around it".
LorenPechtel 5y ago
The problem is that these guys aren't covered by the FCRA. That's what we really need to do--extend the FCRA to cover all companies that gather external data to make decisions that are important to the person. Apply the same standards to all forms of background check--it waddles and quacks, the FCRA applies. I would also change the once-a-year check to say once-a-day. The fundamental problem is that the economics of all background-check companies are skewed towards false denials. The companies are happy to have dodged a bullet (bad renter, bad job applicant etc), nothing tells them that the bullet wasn't real. (And what of those of us whose backgrounds aren't exactly verifiable? I have more than 20 years of employment at companies that no longer exist.)
- astura 5y ago

diebeforei485 5y ago

Is there some CCPA-style remedy where you can get every piece of information that went into your score?

deleted 5y ago

[deleted]

rootusrootus 5y ago

Another problem that only exists due to lack of competition. Landlords hold the upper hand and can afford to be picky. We could collectively decide to solve this, but probably will not.

EricE 5y ago
Want to know how to never have to deal with a landlord? Own your own property! Also if you are concerned about affordable housing, I hope you paid attention to the line in the article that talked about big business moving into the rental scene buying up properties and charging more for rent than mom and pop landlords. Want to know what caused the largest shift of property ownership from small landlords to big conglomerates? All the COVID evection restrictions. We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
- rootusrootus 5y ago
  > Want to know how to never have to deal with a landlord? Own your own property! I feel sympathetic with the folks who are trying to buy into the housing market now. I could not reasonably afford my own house if I were buying it today, and I make pretty good money. There will be a reckoning at some point, this obviously cannot continue indefinitely. > We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come. Yet another example of the road to hell being paved with good intentions. "Seemed like a good idea at the time!"
  - __turbobrew__ 5y ago
    There will be a reckoning, the question is how long the market can stay irrational. I want to purchase a property to raise children in, but unfortunately my partner and I don’t necessarily have the luxury of waiting a long time to have kids for obvious biological reasons. In my country the majority (~60%) of citizens own their own home so the majority of people are riding the gravy train of skyrocketing prices while the others get priced out of home ownership. The reckoning may not happen until a sizeable majority is priced out of home ownership, and that may not happen for a decade. On the global stage I know I am very lucky when it comes to my lifestyle, but it is hard not to feel animosity for the generations which came before you and had it so easy when it comes to property ownership. The same owners who are now benefiting from your inability to afford a stable place to raise a family. I firmly believe that the new Singapore model for taxing non-primary residences is necessary to level the playing field between those who just want to have somewhere to raise a family and those who have billions in their pockets. I don’t believe my country has the will to enact such drastic changes so I am assuming the unaffordability crisis will go on for much longer than necessary.

atlgator 5y ago

What I don’t like about this type of journalism is how they use one instance to set up a boogeyman that they want to scare all of society with. The woman had a 632 credit score in 2021. The average American FICO score was 714 at the same time. She was well below average at a time when housing demands are at all time highs. https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/ https://www.experian.com/blogs/ask-experian/what-is-the-aver...

mistrial9 5y ago
coincidentally, as far as I know, US Court precedent works exactly the same way, in that a single, real world case is the setting for deciding the applicability, reasonableness and effectiveness of laws on the books, not the "spirit and principle in general" .. IANL
- atlgator 5y ago
  Even a single court case is a complex evaluation of current law and precedent to that point. This on the other hand is a straw man fallacy.
- gizmo686 5y ago
  Kind of. Most court cases do not set any precedent. If you think the judge made a legal mistake in your case, you can appeal regarding that specific legal question. The appalete court can then issue a ruling on that specific question of law. If they find the lower court was in error, they would typically send it back to the lower court to redo under the new guidance. Sometimes the specifics of the case do interfere with the appelet court's judgement, but the entire system is set up to minimize that.
jimmaswell 5y ago
I've never missed a payment, have over 6 years of on time payments, never even carried a balance on a card, and never been denied an application, yet my score has dipped as low as 640 just because of a "high" amount of credit checks, because I like to take advantage of "spend $1000 on our card and get $200" promotions that come in the mail. 630 doesn't necessarily mean anything bad at all.

lostgame 5y ago

It should obviously be illegal - preferably criminal - to check a credit score for a place to live, anyway - because a credit score, probably at least half the time - has little to no impact on how reliable of an individual you are financially. I live in Canada, where health care is covered, but dental isn’t. I had an injury several years ago which effectively destroyed many of my teeth, and ended up more than $15,000 into debt over it. I couldn’t make my payments on time for probably a couple years, and even though I finally managed to pay it off, it’s a black spot on my credit history for years to come - through absolutely no fault of my own. This is infinitely worse in the USA, where the pathetic government that promises ‘freedom’ somehow doesn’t get that universal health care is a huge part of that. I have family in the USA who got cancer. Due to the absolutely bullshit health care system there, they are completely, utterly, financially devastated. This family member had to be stopped from committing suicide when they found out just how much it would cost to save their life. That they would have to declare bankruptcy. That their credit score, and anything they'd ever need to do with money in the rest of their life - was completely gone. It’s literally why I don’t live in the USA anymore. Scared me shitless. You know what’s way - way worse than getting cancer? Having to pay more than you could ever possibly afford for getting cancer. Good luck getting a house after that, thanks to this bullshit. According to credit scores - you should be held personally responsible for the fact that you got that disease. Literally - how dare you get cancer. Enjoy having a shit credit score for the rest of however long you have to live. The fact is - people need places to live, and if people have poor credit - especially if it’s of no fault of their own, but due to the bullshit system we live in that has no room for genuine accidents - how the hell are these people ever supposed to find a place to live? I had to go out of my way - and pretty much pay extra - to find a landlady here in Toronto even willing to give me enough understanding to rent a place - and I make about $100k CDN a year. I had to explain the whole situation, come up with documents to prove that’s what actually happened, and even then I was lucky to get a place to rent. I can’t imagine what it’s like for people who might have half or less of my income and poor credit through no fault of their own but are looking for a place to live. Fuck the credit score system. It is an abhorrent human rights issue - is simply disgusting and disturbing - and only serves the rich. A credit score does not take into account for humanness. It’s the nuke of weaponized capitalism, yet another tool to keep the rich more rich and the poor more poor. May the greedy miscreants who developed and enforce this wicked system rot in a special kind of hell.

xyst 5y ago

one of these days, we are going to look back on the absurdity of this current system. Just like we looked back on slavery. Very basic housing should be free. Single payer healthcare should be the standard. Basic income should be provided. As we move towards a more automated society, there are going to be a ton of angry unemployed people with nothing to do but focus their anger on something else.

lolsal 5y ago
> Very basic housing should be free. Please publish where you have developed and built all this free housing so that everyone that wants to live there can enjoy this right.
- tacLog 5y ago
  I mean your are assuming that with free housing you retain a right to live where you want to live. I am NOT saying we should build this free housing in one area and stick people there: (see the many failed public housing attempts) But there are more options available than everyone getting free housing in the bay area, CA.
  - lolsal 5y ago
    > I mean your are assuming that with free housing you retain a right to live where you want to live. I'm not sure why you think that; I never said that anywhere. > But there are more options available than everyone getting free housing in the bay area, CA. Cool, are you going to volunteer to leave your hometown and family to live in this free basic housing? Plenty of land in west Texas if you need space.
- trasz 5y ago
  It’s called social housing and is available in many countries, such as UK. It’s often not literally free, but several times cheaper than market prices.
  - lolsal 5y ago

prirun 5y ago

My auto+homeowner insurance recently increased because they said my credit score was lower this renewal. I pay my auto insurance for the whole year in advance, so why do they give a shit what my credit score is? It's just another gimmick excuse to charge more money. I'm guessing the excuse is necessary to bypass insurance regulations or something.

HideousKojima 5y ago
Given the risk-taking activities of the poor vs. the rich, I don't doubt that some actuarial table shows that lower credit scores correlate with high risk profiles for liability insurance. Whether or not that's moral is another matter.
- nostromo 5y ago
  Just wait until they disallow using credit scores for determining who is credit worthy.
FireBeyond 5y ago
Thankfully my state (and others are joining) disallow the use of credit scores for insurance. Which is good for me - my credit score dropped by nearly ~80 points when I bought a home last year, and 10 months later has only recovered 40 points.
mint2 5y ago
Unfortunately any individual company is not in a position to stop using credit, the only way to stop that practice is for the state regulators to step in due to public pressure. Do your civic duty as you see fit. A company cannot unilaterally drop credit as it will open them up to adverse section.
astura 5y ago
This has actually nothing to do with your premium payment, it's an underwriting risk factor. Research has shown that people with high credit scores make less insurance claims. People who make less insurance claims pay less for insurance. In other words, credit score is a proxy for conscientiousness. Some people don't like that so a few states have outlawed using credit score in underwriting. Hawaii and Massachusetts specifically IIRC.

jvdvegt 5y ago

TIL credit score is a real thing in a Western country - I always figured it was some thing hypothetical. Looks scarily too familiar to the Social score from some Black Mirror episode, or the alleged Chinese system if you ask me.

tacLog 5y ago
As someone from a Western country, what replaces it? How do you buy a car on a loan for example? It's not perfect but unlike both your examples it isn't based on things that could be consider political. You can't lower your credit score by attending a protest for example. Or posting things for or against causes on the internet. I am just honestly wondering what else is our there? It has always seemed like a tool that can be used by both individuals and lenders.
- hocuspocus 5y ago
  Plenty of European countries don't have credit scores. A car loan is collateralized so I don't really see what's complicated.
  - MaxHoppersGhost 5y ago
    The cost of repossessing a car isn’t zero, and even finding the car can be hard. What if the car is trashed when you repossess it? Say they wrecked it and don’t have insurance? This isn’t an uncommon scenario.
    - hocuspocus 5y ago
      No insurance = no registration = no plates. That's a pretty serious offense and it's extremely uncommon over here. Sure, repossession can be costly but debt collection agencies will make your life hell very quickly, it's not something you can drag for years without big consequences.
- PeterisP 5y ago
  At my home the approach is a central registry of defaults that can be accessed with your permission (which is required by some but not all lenders to evaluate you). It's kind of an extreme version of a credit score, where everyone who has never defaulted - or where the cause of default wasn't their fault e.g. identity fraud - has a perfect "credit score". The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.

BXLE_1-1-BitIs1 5y ago

The ideal tenant candidate already owns a house and doesn't need to rent. Having been both landlord and tenant at various stages of my life, my first law of landlording is that trouble from tenants varies inversely with the square of the rent.

drBonkers 5y ago
tenant_trouble ∝ 1/rent²
- deleted 5y ago
  [deleted]
sbierwagen 5y ago
Annoying "well actually" counterexample: my rent hasn't kept up with inflation, and I'm doing everything possible to avoid coming to the notice of my landlord. A call about a leaky faucet could cost me an additional six thousand dollars a year.
- KeepFlying 5y ago
  You've described my situation too, though it's not a rent increase I'm worried about, it's the installation of a mandatory smart lock that I've somehow avoided for a few months now.
  - vsareto 5y ago
    I signed a lease which specifically stated that I was responsible for providing the internet for the smart locks and devices within the apartment. I brought this up to them, but they said "Nah, you don't have to do that" and wouldn't remove it from the lease. They were correct though: everything functioned before I had internet and I never had to join them to my network, but it made me think about the rest of the stuff in the very legally binding lease that worked similarly.
  - safsfaas 5y ago

jijji 5y ago

I have a lot of rentals and the big things that I look for as a landlord is criminal history and make decisions based mostly on that. Credit score doesnt come into the calculation because you have to assume most renters dont have a great credit score. Making sure the person also has a stable income is also part of it.

gwbas1c 5y ago

> But her tenant score was too low for her to rent an apartment without paying an elevated deposit ... never missing a rent payment before moving out early due to the pandemic I know the article didn't explain if she asked to leave early; but if you have a lease, you can't just "up and leave" when you want. That requires negotiating with the landlord.

Gigachad 5y ago
You can in every place I have seen. You are just up for any costs involved in getting a new tenant. In the current market that's close to nothing since someone else will be in the week you move out.

gwbas1c 5y ago

I've heard so many landlord horror stories, I can understand why landlords want something like this. I can also understand why big business is becoming more and more common as landlords; when an individual rents out one or two properties the risk of a bad tenant is far too high. FWIW: I always preferred to rent from professional landlords who owned a 4-5 complexes. Small-time landlords were always too amateur; and large corporate landlords delivered poor value. (IE, I lived in a corporate "luxury" apartment that had junky appliances.)

hn_throwaway_99 5y ago

While I realize this is a personal anecdote, the pandemic made starkly clear that the government will basically commandeer your property and force you to let tenants live there, so with that added risk it's no surprise landlords are being extra careful who they rent to. I had a family member rent to someone in Feb of 2020. He paid one month of rent, and then nothing until the government finally let the eviction go through in Dec 2021. I don't entirely blame.the government, in that if my family member did even basic due diligence they would have seen how much of a grifter this guy was, with previous bankruptcies and other recent evictions. Still, in the past, when you made a mistake and got a bad tenant, the option was eviction. And while the government largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees. As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.

nostromo 5y ago
This happened to me in Seattle. I have a duplex and my renter just stopped paying. It's a joke that this had anything to do with Covid - the job market is tighter than it's ever been. I will never again take a chance on a renter in this city. If you have anything wrong with your credit or income history -- I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government. The other thing that's happening: people like me rarely advertise our units. Instead we look through trusted networks -- friends, family, and co-workers. If you don't have a connection, you can't find these units at all.
- teachrdan 5y ago
  > I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government. I would point out that if people in your position stopped buying rental units and invested your money elsewhere, there would be more housing on the market for renters looking to own their own home.

ganzuul 5y ago

It would be nice if we did away with landlords entirely and enabled people to come out of poverty somehow.

noduerme 5y ago

So here in Oregon, and more so in Portland, there have been some really radical laws passed in the last couple years. You can no longer evict people for cause without offering up to $4k in "relocation cost", and you can no longer see nor use history of felonies including sex offenses outside the past 7 or 8 years to screen tenants. You have to announce the listing publicly and take anyone who says they can pay on a first come, first served basis. And instead of showing 3x the rent as income, you can now only exclude them if they show less than 2x. So essentially the first meth addicted child molester who scraped by 2x your rental price in the last month can move in and never be evicted. It's really great how NPR and ProPublica keep banging on about how unfair it is for anyone who owns anything to request anything of the people they rent to. What about how unfair it is to people like me who worked their asses off to buy a house and want to take care of it? It took me 25 years of work to afford a home. No 22 year old anarchist, bless your soul because I was one, is going to explain to me why I don't deserve it. It's the only property I own. This is why I'm just allowing a friend to live for free in my house while I'm out of the country for the next year, and soaking up the lost rent rather than soaking up potential legal bills and damage. But if things continue this way, I'll sell it to a willing idiot, and everyone here who advocated for this communist shit can enjoy the hell hole they've created for themselves.

blindmute 5y ago
Because people vote for those laws. I can only hope that if and when it becomes too much for you, you don't vote that way in your new locale.

josephd79 5y ago

How is this even legal? This tenant screening report could easily allow someone to discriminate certain individuals. I'm assuming when you fill out a rental application its in the fine print but who or what regulates what data the use?

Helen00 5y ago

juanani 5y ago

Jaradkurtz0 5y ago

glencolemann 5y ago