4 ms·

The concept of credit score isn't something that has always existed in humanity. It's something that we can go on without, even more so given the ridiculous pr

by aprdm 4y ago

The concept of credit score isn't something that has always existed in humanity. It's something that we can go on without, even more so given the ridiculous profitability of banks

JamesBarney 4y ago
If banks stopped lending based on creditworthiness they'd be doing a lot less lending causing far more people to not be able to afford a house.
- aprdm 4y ago
  IMO they need to change their model. If someone has been affording rent at 2k for many years, then they can afford a mortgage at 1.5k, that's not the case nowadays.
  - icelancer 4y ago
    Renting on a yearly basis at $24k/year is very different than committing to the deed transfer on land + house at $18k/year on a 30 year term.
    - alexb_ 4y ago
      For one, rent can get more expensive, vs a fixed rate mortgage which doesn't.
Test0129 4y ago
Credit scores are probably the most useful metric for a person in general. The reason isn't because it's an assessment of creditworthiness, but it saves the time interviewing each person for each loan, asking for quite literally thousands of pages of documentation proving they are creditworthy, etc. If you recall how these things were done before credit scores it was not pretty. Without them lending would virtually cease to all but the most obviously creditworthy people. I generally agree the system for credit scores needs to change. In particular it should not be controlled by a veritable monopoly. But this does not discount the utility of it in general.
- deleted 4y ago
  [deleted]
- EVa5I7bHFq9mnYK 4y ago
  It's also a way to work around the housing discrimination laws.
icelancer 4y ago
Like IQ tests, the credit score has egalitarian roots, but modern day activists think they're discriminatory and should be abolished.
- notch656a 4y ago
  Credit score is hilarious. Until I was like 30 I paid for literally everything with cash. Everything. Never missed a bill. My credit report/score came back "unreportable." Not a shred of data to go off of. I was unable to obtain any credit card. I ultimately had to go to a bank and place $1500 in what was basically a 0% CD for the duration of my credit card, with the agreement my bank would just take it if I didn't pay. After a couple of years of paying that religiously they allowed me to unsecure the funds, but I still had shitty credit afterwards.
  - _vdpp 4y ago
    Dave Ramsey talks a lot about that - to have a good credit score you’ve got to take on debt, which is counterproductive for a lot of people.
  - EVa5I7bHFq9mnYK 4y ago
    Every new immigrant has that problem. I deposited $500 in a credit union and took a secured loan of $500 for 2 years. Did the same at another bank. Also took a secured credit card, as parent comment described. That bumped my credit score up pretty quickly.
- cycomanic 4y ago
  The IQ test does not have egalitarian roots, it was simply a tool designed to diagnose people with severe learning disabilities and was later abused to give a metric to people to feel smug about themselves. It doesn't have significant correlation with any meaningful success metric as soon as we disregard the people with learning disabilities.
sigstoat 4y ago
you don't do someone a favor when you lend them money they can't pay back.
pgwhalen 4y ago
It hasn't always, but something of the sort _has_ existed for a long long time: https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

by aprdm 4y ago

The concept of credit score isn't something that has always existed in humanity. It's something that we can go on without, even more so given the ridiculous profitability of banks

JamesBarney 4y ago

If banks stopped lending based on creditworthiness they'd be doing a lot less lending causing far more people to not be able to afford a house.

aprdm 4y ago
IMO they need to change their model. If someone has been affording rent at 2k for many years, then they can afford a mortgage at 1.5k, that's not the case nowadays.
- icelancer 4y ago
  Renting on a yearly basis at $24k/year is very different than committing to the deed transfer on land + house at $18k/year on a 30 year term.
  - alexb_ 4y ago
    For one, rent can get more expensive, vs a fixed rate mortgage which doesn't.

Test0129 4y ago

Credit scores are probably the most useful metric for a person in general. The reason isn't because it's an assessment of creditworthiness, but it saves the time interviewing each person for each loan, asking for quite literally thousands of pages of documentation proving they are creditworthy, etc. If you recall how these things were done before credit scores it was not pretty. Without them lending would virtually cease to all but the most obviously creditworthy people. I generally agree the system for credit scores needs to change. In particular it should not be controlled by a veritable monopoly. But this does not discount the utility of it in general.

deleted 4y ago
[deleted]
EVa5I7bHFq9mnYK 4y ago
It's also a way to work around the housing discrimination laws.

icelancer 4y ago

Like IQ tests, the credit score has egalitarian roots, but modern day activists think they're discriminatory and should be abolished.

notch656a 4y ago
Credit score is hilarious. Until I was like 30 I paid for literally everything with cash. Everything. Never missed a bill. My credit report/score came back "unreportable." Not a shred of data to go off of. I was unable to obtain any credit card. I ultimately had to go to a bank and place $1500 in what was basically a 0% CD for the duration of my credit card, with the agreement my bank would just take it if I didn't pay. After a couple of years of paying that religiously they allowed me to unsecure the funds, but I still had shitty credit afterwards.
- _vdpp 4y ago
  Dave Ramsey talks a lot about that - to have a good credit score you’ve got to take on debt, which is counterproductive for a lot of people.
- EVa5I7bHFq9mnYK 4y ago
  Every new immigrant has that problem. I deposited $500 in a credit union and took a secured loan of $500 for 2 years. Did the same at another bank. Also took a secured credit card, as parent comment described. That bumped my credit score up pretty quickly.
cycomanic 4y ago
The IQ test does not have egalitarian roots, it was simply a tool designed to diagnose people with severe learning disabilities and was later abused to give a metric to people to feel smug about themselves. It doesn't have significant correlation with any meaningful success metric as soon as we disregard the people with learning disabilities.

sigstoat 4y ago

you don't do someone a favor when you lend them money they can't pay back.

pgwhalen 4y ago

It hasn't always, but something of the sort _has_ existed for a long long time: https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years