this post was submitted on 23 Oct 2023
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I certainly have problems with the way current financial institutions operate, but prior to the credit score there wasn't a standardized, scientific way to assess lending risk. It was left to a good ol' boy process rife with racism, classism, and sexism. Sadly, we're better off with what we have now, as flawed as it is.
If it was a publicly available algorithim, then Id believe you. But it ain't, so I'm suspicious.
We don't know the algorithms specifically, but we have enough information to have a pretty good idea how it works.
It's better than what it was. High time to take another look, but it's far, far better.
It seems to me it doesn't count risk. It counts profitability. It's why it drops when people pay their loans early.
Neither is it now. You forgot the 'hidden from public' part.
They tell u what affects your score right on the credit report! Hahaha What the fuck are u clowns talking about.
And now it's time to nix what we have for something better, just like we did before.
Why would you be better off? In the rest of the world you just have to provide proof of income and proof of savings and debt and banks can calculate how much they are willing to loan you for the purchase of a house. Seems to work fine, and I don't have to have pay interest on meaningless loans just to prove that I can.
The problem is that just having the income and savings doesn't necessarily guarantee that you'll be as good about paying back a loan as someone of your same income and savings.
That's supposed to be where the credit score helps, but the current system is so shady that it basically just reads as the ol' boys club system but asking pretty please to pretend there's a formula and method being used.
I think there are plenty of failsafe mechanisms. But most importantly, if you fail to pay your mortgage, the bank has the right to take possession of your house. Those forces the bank to do it's due diligence with regards to the value of the house. Also, if a bank has been too lenient with its mortgages, it can get into serious trouble - the government here enforces pretty strict rules to prevent people from getting in over their heads.
If you don’t take credit facilities but pay for your expenses in cash, you are considered a risk. Credit scoring based on credit card purchases is akin to being required to be spied on every step of the way just so you can access what you practically can without the credit in the first place. I don’t have a problem with people who are fine with that kind of behavior. But there should be a way of fair assessment even if you pay in cash.
Yeah. It's really changed a lot...