5 ms·

The fact that we haven't nationalized credit reporting absolutely baffles me. These companies have so much power over our lives, are completely unaccountable,

by munk-a 3y ago

The fact that we haven't nationalized credit reporting absolutely baffles me. These companies have so much power over our lives, are completely unaccountable, and are so incredibly incompetent.

dools 3y ago
Yes and then people claim the social credit scoring system in china is a dystopian hellscape. I happen to think it’s far less dystopian that privately run financial credit reporting agencies.
- lwhi 3y ago
  I think social credit scoring is another level closer to hell.
  - Aaargh20318 3y ago
    Isn't is pretty much the same thing in the US, where financial and social status are more or less equivalent anyway?
    - lwhi 3y ago
      Your score isn't affected if you jay walk, so no.
jasonwatkinspdx 3y ago
Years ago I worked in the industry and I totally agree. Fair Isaac in particular has enormous power as basically the only source of models people use, and they are very opaque.
silveraxe93 3y ago
Right, so as a solution to them having: too much power over our lives, being unaccountable and incompetent. Is: Giving the backing of the state over their actions. Move from being accountable to government to _being_ the government. And the competency of giant public bureaucracies!
Aaargh20318 3y ago
The whole credit rating system as it is in the US seems complete ass-backwards to me. It basically encourages people to go into debt to build a history of paying it back in time. Here in the Netherlands it works exactly the opposite: the best 'rating' is to not be in the system at all. When you get a loan, the amount and monthly payments are registered. This registration is removed once you have paid back the loan. When you ask your bank for a loan, they basically look at two things: how much is your income and how much are your current financial obligations (i.e. existing loans). Cost of living is subtracted from your monthly income, as well as the monthly payments of your existing loans (from the national debt registry). What's left is how much (additional) monthly payment you can afford. If the monthly payment for your newly requested loan is above this number it will be refused. As such there is no such thing as a good or bad rating, only what you can and cannot afford.
- ryukoposting 3y ago
  There are a million things broken about the American credit reporting system, but I'm going to try to make a case for one very specific part of it: > how much is your income and how much are your current financial obligations This doesn't work if your income doesn't show up in the government's system. For example, if your income comes from illegal activity. Crime is bad and you shouldn't do it, but crime is an economy and some people really don't have a better option. If your income comes from criminal activity, getting boxed out of the consumer financial system isn't helping you towards any avenue where crime is no longer the best option.
  - Aaargh20318 3y ago
    > This doesn't work if your income doesn't show up in the government's system. For example, if your income comes from illegal activity. It's not a government system. Banks will typically ask for a payslip. > For example, if your income comes from illegal activity. You think banks are going to give you a loan if your income is from criminal activity? That's cute. Banks are required to report suspicious activity and the last thing they want is even the appearance of being involved in money laundering. It's a problem for certain professions, like sex workers (which is a perfectly legal occupation here) as they mostly get paid in cash and often deposit large amounts of it they are an obvious channel for money laundering and as such they have a hard time just getting a bank account, never mind getting a loan.

by munk-a 3y ago

The fact that we haven't nationalized credit reporting absolutely baffles me. These companies have so much power over our lives, are completely unaccountable, and are so incredibly incompetent.

dools 3y ago

Yes and then people claim the social credit scoring system in china is a dystopian hellscape. I happen to think it’s far less dystopian that privately run financial credit reporting agencies.

lwhi 3y ago
I think social credit scoring is another level closer to hell.
- Aaargh20318 3y ago
  Isn't is pretty much the same thing in the US, where financial and social status are more or less equivalent anyway?
  - lwhi 3y ago
    Your score isn't affected if you jay walk, so no.

jasonwatkinspdx 3y ago

Years ago I worked in the industry and I totally agree. Fair Isaac in particular has enormous power as basically the only source of models people use, and they are very opaque.

silveraxe93 3y ago

Right, so as a solution to them having: too much power over our lives, being unaccountable and incompetent. Is: Giving the backing of the state over their actions. Move from being accountable to government to _being_ the government. And the competency of giant public bureaucracies!

Aaargh20318 3y ago

The whole credit rating system as it is in the US seems complete ass-backwards to me. It basically encourages people to go into debt to build a history of paying it back in time. Here in the Netherlands it works exactly the opposite: the best 'rating' is to not be in the system at all. When you get a loan, the amount and monthly payments are registered. This registration is removed once you have paid back the loan. When you ask your bank for a loan, they basically look at two things: how much is your income and how much are your current financial obligations (i.e. existing loans). Cost of living is subtracted from your monthly income, as well as the monthly payments of your existing loans (from the national debt registry). What's left is how much (additional) monthly payment you can afford. If the monthly payment for your newly requested loan is above this number it will be refused. As such there is no such thing as a good or bad rating, only what you can and cannot afford.

ryukoposting 3y ago
There are a million things broken about the American credit reporting system, but I'm going to try to make a case for one very specific part of it: > how much is your income and how much are your current financial obligations This doesn't work if your income doesn't show up in the government's system. For example, if your income comes from illegal activity. Crime is bad and you shouldn't do it, but crime is an economy and some people really don't have a better option. If your income comes from criminal activity, getting boxed out of the consumer financial system isn't helping you towards any avenue where crime is no longer the best option.
- Aaargh20318 3y ago
  > This doesn't work if your income doesn't show up in the government's system. For example, if your income comes from illegal activity. It's not a government system. Banks will typically ask for a payslip. > For example, if your income comes from illegal activity. You think banks are going to give you a loan if your income is from criminal activity? That's cute. Banks are required to report suspicious activity and the last thing they want is even the appearance of being involved in money laundering. It's a problem for certain professions, like sex workers (which is a perfectly legal occupation here) as they mostly get paid in cash and often deposit large amounts of it they are an obvious channel for money laundering and as such they have a hard time just getting a bank account, never mind getting a loan.