Congrats - Your Data Was Stolen... Again

[bilby]

How about not giving private citizens credit ratings at all, and/or not allowing the use of third party credit ratings by lenders to private citizens?

The US seems to be the only OECD nation where such ratings are ubiquitous (despite recent attempts by the rating agencies to expand their businesses internationally), and your country appears to be a worse place to live as a consequence of this (often flawed) system, which looks to me to be just as cruel and capricious as tbe Chinese social credit score system.

What's your alternative for keeping track of who pays their bills and who doesn't?

Why do you need to do that? The rest of the developed world manages just fine without doing it.

Lenders determine who can pay, and lend to those people - that is, they look at their income and expenditure, at the time the loan is being considered.

If they don't then make their payments, the security is seized, and/or they go to court.

The entire concept of "credit rating" is based on the extremely dubious ideas that people never change, and that somebody who hasn't paid off a loan in the past, won't pay one off in the future - even if the reason that they didn't pay a loan off in the past was because they didn't take on a loan in the past.

It's more of the tired old puritan stupidity that assigns everyone a life-long, god-given, level of moral probity.

Credit ratings vary based on your behavior, they are not set in stone.

And it is a very useful measure, both of paying (for most debt there's no verification of income. The fact that you have a good record of paying what you owe is considered a pretty good indication you're not biting off more than you can chew) and as a general measure of responsibility. (While there are a few with bad credit ratings through no fault of their own the vast majority ended up there through not being careful.)

As for not having taken a loan in the past--all loans have aged off our credit reports by now. It's purely from paying credit cards, nothing else. Our ratings are in the ballpark of 800--and lenders treat anything above 740 the same. Thus if for some reason we were to apply for a loan we would be considered a good risk.

I am not ignorant of the system, I am derisive of it.

 

[Loren Pechtel]

Why do you need to do that? The rest of the developed world manages just fine without doing it.

Lenders determine who can pay, and lend to those people - that is, they look at their income and expenditure, at the time the loan is being considered.

If they don't then make their payments, the security is seized, and/or they go to court.

The entire concept of "credit rating" is based on the extremely dubious ideas that people never change, and that somebody who hasn't paid off a loan in the past, won't pay one off in the future - even if the reason that they didn't pay a loan off in the past was because they didn't take on a loan in the past.

It's more of the tired old puritan stupidity that assigns everyone a life-long, god-given, level of moral probity.

Credit ratings vary based on your behavior, they are not set in stone.

And it is a very useful measure, both of paying (for most debt there's no verification of income. The fact that you have a good record of paying what you owe is considered a pretty good indication you're not biting off more than you can chew) and as a general measure of responsibility. (While there are a few with bad credit ratings through no fault of their own the vast majority ended up there through not being careful.)

As for not having taken a loan in the past--all loans have aged off our credit reports by now. It's purely from paying credit cards, nothing else. Our ratings are in the ballpark of 800--and lenders treat anything above 740 the same. Thus if for some reason we were to apply for a loan we would be considered a good risk.

I am not ignorant of the system, I am derisive of it.

And what's your superior alternative for sorting out the deadbeats?

 

[bilby]

Why do you need to do that? The rest of the developed world manages just fine without doing it.

Lenders determine who can pay, and lend to those people - that is, they look at their income and expenditure, at the time the loan is being considered.

If they don't then make their payments, the security is seized, and/or they go to court.

The entire concept of "credit rating" is based on the extremely dubious ideas that people never change, and that somebody who hasn't paid off a loan in the past, won't pay one off in the future - even if the reason that they didn't pay a loan off in the past was because they didn't take on a loan in the past.

It's more of the tired old puritan stupidity that assigns everyone a life-long, god-given, level of moral probity.

Credit ratings vary based on your behavior, they are not set in stone.

And it is a very useful measure, both of paying (for most debt there's no verification of income. The fact that you have a good record of paying what you owe is considered a pretty good indication you're not biting off more than you can chew) and as a general measure of responsibility. (While there are a few with bad credit ratings through no fault of their own the vast majority ended up there through not being careful.)

As for not having taken a loan in the past--all loans have aged off our credit reports by now. It's purely from paying credit cards, nothing else. Our ratings are in the ballpark of 800--and lenders treat anything above 740 the same. Thus if for some reason we were to apply for a loan we would be considered a good risk.

I am not ignorant of the system, I am derisive of it.

And what's your superior alternative for sorting out the deadbeats?

FFS.

There's no such thing as "the deadbeats". The human race cannot be divided neatly into tidy caregories of good/evil, criminal/law abiding, naughty/nice, or deadbeat/trustworthy.

Attempting to do so is a stupid vestige of puritanism.

That many Americans literally cannot imagine that this impossible categorisation is not a law of nature, doesn't make it a law of nature.

You cannot "sort out the deadbeats", any more than you can "jail all the criminals", or "hang all the witches"; and attempting to do so makes society a worse place to live for everybody.

While I deride the specific instance of this idiocy that is represented by the concept of credit ratings for individual citizens, I am even more derisive of the underlying broken philosophy it represents; And I continue to be horrified that you have been so effectively conditioned to accept that philosophy, that you are literally incapable of considering any other way of looking at your fellow human beings.

When I express horror at the use of Hollerinth Tabulators to assist the Nazis in rounding up every last Jew, it isn't a relevant response to ask "How else would you sort out all the Jews* with 1930s technology?".

I don't dislike the method, I dislike the goal towards which it is intended.

* and note that "Jew" isn't a real category either; The definition varies significantly, with some orthodox sects having very limited and restricted definitions based on observance of ritual, while most Jews have a broader matrilineal definition in which ritual is irrelevant, and the NSDAP had a far broader definition yet, in which patrilineal descent was considered to be of central importance. I am not a Jew by most modern reckonings, but I am Jewish enough to have been sent to the camps by the Nazis.

So there you go - Godwin has been satisfied, and you can go away in the cosy belief that my comparison with Naziism implies that your daft philosophy hasn't been validly challenged.

 

[Harry Bosch]

Why do you need to do that? The rest of the developed world manages just fine without doing it.

Lenders determine who can pay, and lend to those people - that is, they look at their income and expenditure, at the time the loan is being considered.

If they don't then make their payments, the security is seized, and/or they go to court.

The entire concept of "credit rating" is based on the extremely dubious ideas that people never change, and that somebody who hasn't paid off a loan in the past, won't pay one off in the future - even if the reason that they didn't pay a loan off in the past was because they didn't take on a loan in the past.

It's more of the tired old puritan stupidity that assigns everyone a life-long, god-given, level of moral probity.

Credit ratings vary based on your behavior, they are not set in stone.

And it is a very useful measure, both of paying (for most debt there's no verification of income. The fact that you have a good record of paying what you owe is considered a pretty good indication you're not biting off more than you can chew) and as a general measure of responsibility. (While there are a few with bad credit ratings through no fault of their own the vast majority ended up there through not being careful.)

As for not having taken a loan in the past--all loans have aged off our credit reports by now. It's purely from paying credit cards, nothing else. Our ratings are in the ballpark of 800--and lenders treat anything above 740 the same. Thus if for some reason we were to apply for a loan we would be considered a good risk.

I am not ignorant of the system, I am derisive of it.

And what's your superior alternative for sorting out the deadbeats?

FFS.

There's no such thing as "the deadbeats". The human race cannot be divided neatly into tidy caregories of good/evil, criminal/law abiding, naughty/nice, or deadbeat/trustworthy.

Attempting to do so is a stupid vestige of puritanism.

That many Americans literally cannot imagine that this impossible categorisation is not a law of nature, doesn't make it a law of nature.

You cannot "sort out the deadbeats", any more than you can "jail all the criminals", or "hang all the witches"; and attempting to do so makes society a worse place to live for everybody.

While I deride the specific instance of this idiocy that is represented by the concept of credit ratings for individual citizens, I am even more derisive of the underlying broken philosophy it represents; And I continue to be horrified that you have been so effectively conditioned to accept that philosophy, that you are literally incapable of considering any other way of looking at your fellow human beings.

When I express horror at the use of Hollerinth Tabulators to assist the Nazis in rounding up every last Jew, it isn't a relevant response to ask "How else would you sort out all the Jews* with 1930s technology?".

I don't dislike the method, I dislike the goal towards which it is intended.

* and note that "Jew" isn't a real category either; The definition varies significantly, with some orthodox sects having very limited and restricted definitions based on observance of ritual, while most Jews have a broader matrilineal definition in which ritual is irrelevant, and the NSDAP had a far broader definition yet, in which patrilineal descent was considered to be of central importance. I am not a Jew by most modern reckonings, but I am Jewish enough to have been sent to the camps by the Nazis.

So there you go - Godwin has been satisfied, and you can go away in the cosy belief that my comparison with Naziism implies that your daft philosophy hasn't been validly challenged.

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both? If so, the issues causing this is most likely too much debt? So, if someone has poor credit, it benefits noone to extend further debt to that person.

 

[bilby]

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both?

"Probably" covers a multitude of sins.

It is quite possible for someone to have poor credit due to an error; Or due to temporary circumstances in their past that have zero bearing on their current situation.

If so, the issues causing this is most likely too much debt?

"Probably" doesn't get better by chaining it with a "most likely"; Now we are into "wildly speculating".

Simply looking at a persons current circumstances obviates any benefit from a credit rating. Such ratings benefit only the rating agencies, who get paid to compile and disseminate them.

So, if someone has poor credit, it benefits noone to extend further debt to that person.

That does not follow. If someone is a poor risk, it's unwise to extend further debt to them; But that's not the same. At all.

 

[Harry Bosch]

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both?

"Probably" covers a multitude of sins.

It is quite possible for someone to have poor credit due to an error; Or due to temporary circumstances in their past that have zero bearing on their current situation.

If so, the issues causing this is most likely too much debt?

"Probably" doesn't get better by chaining it with a "most likely"; Now we are into "wildly speculating".

Simply looking at a persons current circumstances obviates any benefit from a credit rating. Such ratings benefit only the rating agencies, who get paid to compile and disseminate them.

So, if someone has poor credit, it benefits noone to extend further debt to that person.

That does not follow. If someone is a poor risk, it's unwise to extend further debt to them; But that's not the same. At all.

Well, my point here is that giving someone additional debt who is struggling to make their existing payments on time is hurting that individual.

 

[ZiprHead]

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both?

"Probably" covers a multitude of sins.

It is quite possible for someone to have poor credit due to an error; Or due to temporary circumstances in their past that have zero bearing on their current situation.

If so, the issues causing this is most likely too much debt?

"Probably" doesn't get better by chaining it with a "most likely"; Now we are into "wildly speculating".

Simply looking at a persons current circumstances obviates any benefit from a credit rating. Such ratings benefit only the rating agencies, who get paid to compile and disseminate them.

So, if someone has poor credit, it benefits noone to extend further debt to that person.

That does not follow. If someone is a poor risk, it's unwise to extend further debt to them; But that's not the same. At all.

Well, my point here is that giving someone additional debt who is struggling to make their existing payments on time is hurting that individual.

The possibility exists that not giving them the additional debt may hurt them more.

 

[Harry Bosch]

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both?

"Probably" covers a multitude of sins.

It is quite possible for someone to have poor credit due to an error; Or due to temporary circumstances in their past that have zero bearing on their current situation.

If so, the issues causing this is most likely too much debt?

"Probably" doesn't get better by chaining it with a "most likely"; Now we are into "wildly speculating".

Simply looking at a persons current circumstances obviates any benefit from a credit rating. Such ratings benefit only the rating agencies, who get paid to compile and disseminate them.

So, if someone has poor credit, it benefits noone to extend further debt to that person.

That does not follow. If someone is a poor risk, it's unwise to extend further debt to them; But that's not the same. At all.

Well, my point here is that giving someone additional debt who is struggling to make their existing payments on time is hurting that individual.

The possibility exists that not giving them the additional debt may hurt them more.

If someone is struggling to make their payments; giving them a loan will help them make their current payments; in the short term. However, the additional debt will increase their monthly payments. So it's just a short term fix that hurts them in the longer run.

 

[bilby]

Well, my point here is that giving someone additional debt who is struggling to make their existing payments on time is hurting that individual.

Well I agree.

The dispute here is whether credit ratings are the best, or even an effective, way to avoid that problem, while maximising the credit available to improve people's lives.

 

[bilby]

If someone is struggling to make their payments

We are not talking about someone who is struggling to make their payments. We are talking about someone who has a poor credit rating.

While these should be, if not the same, at least vaguely similar, measures of a persons circumstances, my position is that they are not in fact sufficiently similar to justify using the latter to identify the former.

Credit rating is a poor proxy for ability to service new debt, and the unthinking assumption that it is a good (or even the only possible) measure of that ability does far more harm than good.

 

[Loren Pechtel]

And what's your superior alternative for sorting out the deadbeats?

FFS.

There's no such thing as "the deadbeats". The human race cannot be divided neatly into tidy caregories of good/evil, criminal/law abiding, naughty/nice, or deadbeat/trustworthy.

The lack of such checking means your creditors must be much more restrictive in lending. The credit score system is an advantage to those of us who pay our bills. When some company comes along and offers some sort of bonus for using their card it's easy to accept it. The objective is to verify that I am who I say I am. That + my credit rating gets some pretty nice offers for using their brand card in their store, typically in seconds. The only time I've had to actually show income was for buying a house. Everything else, including a car, was simply a look at my credit rating, it showed that I am careful.

On the flip side, if your credit is bad they don't need to waste their time figuring that out.

So long as the data is accurate what's the down side??

Attempting to do so is a stupid vestige of puritanism.

That many Americans literally cannot imagine that this impossible categorisation is not a law of nature, doesn't make it a law of nature.

You cannot "sort out the deadbeats", any more than you can "jail all the criminals", or "hang all the witches"; and attempting to do so makes society a worse place to live for everybody.

Credit ratings are not about punishment, they are about who do you trust to pay you back? If you don't want to borrow money a credit rating has almost no relevance. Think of them like product reviews, except with a formalized rating system so there are no bogus ratings.

 

[Loren Pechtel]

Well, would you agree that if someone had poor credit, it was probably due to either high debt to income or missed payments or both?

"Probably" covers a multitude of sins.

It is quite possible for someone to have poor credit due to an error; Or due to temporary circumstances in their past that have zero bearing on their current situation.

If it's an error you get it fixed. The number of such cases is low.

Very rarely is it "temporary circumstances". Such things are almost always because someone went onto thin ice.

Simply looking at a persons current circumstances obviates any benefit from a credit rating. Such ratings benefit only the rating agencies, who get paid to compile and disseminate them.

You need a fairly detailed look at their circumstances to draw any real conclusions. And without some sort of credit system how do you know who else they might owe money to? And they most certainly benefit us consumers in the ease with which we can obtain credit. (Which is useful even if we don't actually intend to borrow. I have 4 cards that offer discounts in the 5-10% range for use in their store.)

 

[Loren Pechtel]

If someone is struggling to make their payments

We are not talking about someone who is struggling to make their payments. We are talking about someone who has a poor credit rating.

While these should be, if not the same, at least vaguely similar, measures of a persons circumstances, my position is that they are not in fact sufficiently similar to justify using the latter to identify the former.

Credit rating is a poor proxy for ability to service new debt, and the unthinking assumption that it is a good (or even the only possible) measure of that ability does far more harm than good.

Experience shows that it's a very good proxy. And your measure doesn't work, either--it will fail to spot the people that have good incomes but spend everything they get. (I'm thinking back many years ago. Guy with ~$500k/yr of income freaking about a letter from the IRS after $50k because he didn't have it available. Incredibly relieved when I pointed to the error on his return, move that number there and the bill will go away. (He had the right numbers but one was reported wrong and the IRS matching computer saw money coming in on a 1099 and no corresponding entry on his return.))

 

[bilby]

So long as the data is accurate what's the down side??

The data is never accurate.

That's a universal rule of data systems generally, by the way.

 

[bilby]

with a formalized rating system so there are no bogus ratings

There are always bogus ratings.

 

[Loren Pechtel]

So long as the data is accurate what's the down side??

The data is never accurate.

That's a universal rule of data systems generally, by the way.

It doesn't have to be perfect, just better than the alternatives.

 

[ZiprHead]

So long as the data is accurate what's the down side??

The data is never accurate.

That's a universal rule of data systems generally, by the way.

It doesn't have to be perfect, just better than the alternatives.

I need to bookmark this for use later.

 

[bilby]

So long as the data is accurate what's the down side??

The data is never accurate.

That's a universal rule of data systems generally, by the way.

It doesn't have to be perfect, just better than the alternatives.

It's neither perfect, nor as good as, much less better than, the alternatives.

Regardless, your implied retraction is noted.

 

[GenesisNemesis]

Yeah but I still have my kidneys.

 

[Loren Pechtel]

So long as the data is accurate what's the down side??

The data is never accurate.

That's a universal rule of data systems generally, by the way.

It doesn't have to be perfect, just better than the alternatives.

I need to bookmark this for use later.

It's a basic truism if you realize the world isn't black and white.

There are almost certainly no perfect answers and almost certainly no perfect data. You do the best you can, you don't throw things out for not being perfect.