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With respect to housing specifically? I’d be ok with a bunch of different tax policy changes, various policies that encourage housing development, etc... This

With respect to housing specifically? I’d be ok with a bunch of different tax policy changes, various policies that encourage housing development, etc... This change in fico value sends a message that will have a very negative impact on those who really need to be encouraged to be better savers, to be more debt averse. If you know many poor people you will understand that they often have pathological issues with their thinking and decisions around debt/credit. Policy that lessens the importance of sound financial decisions will have a negative impact on these groups. They would be much better served by policy reinforcing positive behaviors.

cogitoergofutuo 3y ago
I have lots of poor friends and I have never heard any of them indicate that they’re making their savings decisions based off of the shifting advantages of their FICO scores. I never really quite understood the reasoning that poor people are poor due to a lack of incentives to become not-poor. Being poor isn’t fun, it actually sucks. If poor people are poor because of a pathology as you suggest, what incremental changes to mortgage rates would create an incentive big enough to overcome such an obstacle?
- 2devnull 3y ago
  I don’t think poverty can be reduced to any one cause. People are poor for a lot of different reasons, often multiple reasons. Some people have problems with financial reasoning, or other psychological money related issues (shopping addiction, gambling, etc). These are groups that do not benefit from mixed messaging about the importance of managing their credit. Credit ratings are a way for lenders to assess risk which allows them to loan out more money, and money to those with fewer assets, than they would be able to lend without the signal credit ratings provide. Diminishing the value of credit ratings is counter to the best interests of the poor and those who see upward mobility as a positive (obviously not everyone!)
  - deleted 3y ago
    [deleted]
svnt 3y ago
This is some 19th century othering. By your definition every group that is subject to different constraints than you has a pathology. People who cannot afford everything they need (even once in a great while, or intermittently) sometimes have to make a choice you don’t: their credit score or keeping their housing, or their credit score or keeping a job, or their credit score or eating. This makes them an increased risk systemically. However representationally they do not have the ability to pull themselves out of poverty because there will be poverty in the system we presently exist in. So if they pull themselves out, someone else slides in, and the systemic risk is the same, and in that context the credit rating is a largely worthless lagging indicator that says “This person at one point in recent history could not afford the commitments they made. We have no idea why, or what those commitment were, or even whether they were the result of financial practices that are now illegal.” What is happening is the world waking up slowly to the idea that a good credit rating is in part a privilege, and not any reflection necessarily of a persons’ ability or willingness to pay for housing.

cogitoergofutuo 3y ago

I have lots of poor friends and I have never heard any of them indicate that they’re making their savings decisions based off of the shifting advantages of their FICO scores. I never really quite understood the reasoning that poor people are poor due to a lack of incentives to become not-poor. Being poor isn’t fun, it actually sucks. If poor people are poor because of a pathology as you suggest, what incremental changes to mortgage rates would create an incentive big enough to overcome such an obstacle?

2devnull 3y ago
I don’t think poverty can be reduced to any one cause. People are poor for a lot of different reasons, often multiple reasons. Some people have problems with financial reasoning, or other psychological money related issues (shopping addiction, gambling, etc). These are groups that do not benefit from mixed messaging about the importance of managing their credit. Credit ratings are a way for lenders to assess risk which allows them to loan out more money, and money to those with fewer assets, than they would be able to lend without the signal credit ratings provide. Diminishing the value of credit ratings is counter to the best interests of the poor and those who see upward mobility as a positive (obviously not everyone!)
- deleted 3y ago
  [deleted]

svnt 3y ago

This is some 19th century othering. By your definition every group that is subject to different constraints than you has a pathology. People who cannot afford everything they need (even once in a great while, or intermittently) sometimes have to make a choice you don’t: their credit score or keeping their housing, or their credit score or keeping a job, or their credit score or eating. This makes them an increased risk systemically. However representationally they do not have the ability to pull themselves out of poverty because there will be poverty in the system we presently exist in. So if they pull themselves out, someone else slides in, and the systemic risk is the same, and in that context the credit rating is a largely worthless lagging indicator that says “This person at one point in recent history could not afford the commitments they made. We have no idea why, or what those commitment were, or even whether they were the result of financial practices that are now illegal.” What is happening is the world waking up slowly to the idea that a good credit rating is in part a privilege, and not any reflection necessarily of a persons’ ability or willingness to pay for housing.