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This is more to do with people who don't have traditional indicators for credit scores, rather than throwing away everything else. The Economist covered it a w
by cmdkeen 13y ago
This is more to do with people who don't have traditional indicators for credit scores, rather than throwing away everything else.
The Economist covered it a while back in developing nations - if your credit score suffers because of a friend you can exert social pressure on them to pay back the loan. You don't want to be known as a deadbeat to your friends so you are less likely to take out a loan you can't afford.
Though in that example the social network is an explicit opt-in I believe.
- 001sky 13y agoThere is most likely an informal 'friends of friends' effect for the wealthy and priviledged in any event. Take a look at, for example, the VC market and its extensive reliance on private, pre-existing relationships. While equity is not credit, the techniques of investment selecetion (both deal generation and screening) are at a macro level shared elements. Now, the more concerning issue is when poor people are flagged as at risk because they are poor. Sort of the reverse of the well connected wealthy people getting a helping hand.