3 ms·

It's complicated. If you're in the early-early stages where you're just funding the startup yourself, you may not want to pay yourself a salary for various rea

It's complicated. If you're in the early-early stages where you're just funding the startup yourself, you may not want to pay yourself a salary for various reasons (e.g. offsetting your losses against future earnings for tax reasons). If you do cut yourself a paycheck, the model will probably assume that's all the money you make and won't understand the fact that you're also the owner of some business. So it might backfire, if you try to game the model by paying yourself a very small amount just so you get to be in the employed-category rather than the self-employed category. ...maybe I'm just being stupid for ticking the "self-employed" box rather than try to make it look on paper like there's basically no difference between my situation and that of an employee in a bigcorp. I just don't know. Statistically, I probably am a risk. But I've never had an actual credit event, am not planning on having one in the future, and any time I want money, I can just pick up the phone to a freelancing agency, and by next week, I'll be making more money than most of my highschool friends. So in that sense, I'm not a credit risk. There's just no way to explain that to a risk model.

piva00 4y ago
> But I've never had an actual credit event, am not planning on having one in the future, and any time I want money, I can just pick up the phone to a freelancing agency, and by next week, I'll be making more money than most of my highschool friends. So in that sense, I'm not a credit risk. There's just no way to explain that to a risk model. You know the issue, the risk modeling will never take into account a subjective experience such as "I can pick up the phone and make bank", there's no way to price that in, it's a very edge case that requires some human intervention to understand it. If you did that consistently over a couple of years and had tax returns to prove you can do it reliably I'm sure some credit models I worked with would use that as a strong signal, right now you are definitely a risk (and you are aware of it), what exactly do you expect risk models to do in your case? In that, I believe we should leave some room for human intervention in some automated systems; credit models/risk assessment models would be one of those, you should be able to meet a real person, show them how you are not as risky as their modeling says you are and be able to present/defend your case to invalidate their automated assessment.
- stakhanov 4y ago
  > what exactly do you expect risk models to do in your case? I'm not complaining, just responding to others on this thread to whom the connection between consumer credit rating and being a startup founder wasn't so obvious. > [...] we should leave some room for human intervention [...] I couldn't agree more, and this is not something we can take for granted. I see a dystopia lurking around the corner where only HNW individuals get the privilege of attention from human bankers and automated decisions can effectively block the path towards ever getting there. But that's a topic all of its own.

piva00 4y ago

> But I've never had an actual credit event, am not planning on having one in the future, and any time I want money, I can just pick up the phone to a freelancing agency, and by next week, I'll be making more money than most of my highschool friends. So in that sense, I'm not a credit risk. There's just no way to explain that to a risk model. You know the issue, the risk modeling will never take into account a subjective experience such as "I can pick up the phone and make bank", there's no way to price that in, it's a very edge case that requires some human intervention to understand it. If you did that consistently over a couple of years and had tax returns to prove you can do it reliably I'm sure some credit models I worked with would use that as a strong signal, right now you are definitely a risk (and you are aware of it), what exactly do you expect risk models to do in your case? In that, I believe we should leave some room for human intervention in some automated systems; credit models/risk assessment models would be one of those, you should be able to meet a real person, show them how you are not as risky as their modeling says you are and be able to present/defend your case to invalidate their automated assessment.

stakhanov 4y ago
> what exactly do you expect risk models to do in your case? I'm not complaining, just responding to others on this thread to whom the connection between consumer credit rating and being a startup founder wasn't so obvious. > [...] we should leave some room for human intervention [...] I couldn't agree more, and this is not something we can take for granted. I see a dystopia lurking around the corner where only HNW individuals get the privilege of attention from human bankers and automated decisions can effectively block the path towards ever getting there. But that's a topic all of its own.