this post was submitted on 21 Feb 2024
603 points (97.3% liked)

Today I Learned

17925 readers
560 users here now

What did you learn today? Share it with us!

We learn something new every day. This is a community dedicated to informing each other and helping to spread knowledge.

The rules for posting and commenting, besides the rules defined here for lemmy.world, are as follows:

Rules (interactive)


Rule 1- All posts must begin with TIL. Linking to a source of info is optional, but highly recommended as it helps to spark discussion.

** Posts must be about an actual fact that you have learned, but it doesn't matter if you learned it today. See Rule 6 for all exceptions.**



Rule 2- Your post subject cannot be illegal or NSFW material.

Your post subject cannot be illegal or NSFW material. You will be warned first, banned second.



Rule 3- Do not seek mental, medical and professional help here.

Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.



Rule 4- No self promotion or upvote-farming of any kind.

That's it.



Rule 5- No baiting or sealioning or promoting an agenda.

Posts and comments which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.



Rule 6- Regarding non-TIL posts.

Provided it is about the community itself, you may post non-TIL posts using the [META] tag on your post title.



Rule 7- You can't harass or disturb other members.

If you vocally harass or discriminate against any individual member, you will be removed.

Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.

For further explanation, clarification and feedback about this rule, you may follow this link.



Rule 8- All comments should try to stay relevant to their parent content.



Rule 9- Reposts from other platforms are not allowed.

Let everyone have their own content.



Rule 10- Majority of bots aren't allowed to participate here.

Unless included in our Whitelist for Bots, your bot will not be allowed to participate in this community. To have your bot whitelisted, please contact the moderators for a short review.



Partnered Communities

You can view our partnered communities list by following this link. To partner with our community and be included, you are free to message the moderators or comment on a pinned post.

Community Moderation

For inquiry on becoming a moderator of this community, you may comment on the pinned post of the time, or simply shoot a message to the current moderators.

founded 1 year ago
MODERATORS
 

I always assumed credit scores were an integral and historic part of the American financial system.

They were not, they are very recent,most of your parents didn't have credit scores growing up, and as you can probably tell or at least intuit, it's mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.

you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] -5 points 9 months ago* (last edited 9 months ago) (3 children)

Your hypothesis is that before computers and data centers were used in business to cross-reference, centralize, analyze and store private and public data, and before a personal credit rating system was implemented, businesses were using cross referenced, centralized, analyzed mountains of paper files on all potential consumers nationwide, directly related to their business or not, to calculate 300+ million personal credit scores that didn't exist yet?

You're taking more than a leap, you're jumping right off the cliff.

[–] Carighan 13 points 9 months ago* (last edited 9 months ago) (1 children)

Uh, okay then. Damn I'm old. Apparently. 🧐 Funny though that the younger generation cannot imagine how life worked pre-personal-computers (or even before computers entirely).

[–] [email protected] -3 points 9 months ago

It's the same with each generation. You probably didn't have to take academic tests on how many bushels of carrots you could bring to market a week because you weren't educated as a yeoman, as previous generations to you were, when that data was more relevant.

I think the younger generation understands how things worked before computers became widespread, but it isn't relevant to there life or much of the current global order, so it isn't at the forefront of their mind.

[–] AA5B 6 points 9 months ago (1 children)

No, you’re just taking a binary view of history.

  • before there was any transparency, decisions were made based on your credit score and report, but it was tough to argue when they didn’t have to tell you why
  • before there were standard scores and reports, there were still computers and networks. Each bank did similar by themselves
  • before there was centralized banking records per corporation, they had to collect similar data about you and each bank had policies for a banker to decide
[–] [email protected] 0 points 9 months ago (1 children)
  1. Yes, before you had a predetermined credit score, your credit score was assessed on a case-by-case basis. I don't know why you think things are transparent now.

  2. Computers are not as old as you think they are.

  3. Yes, before you had a predetermined credit score, your credit score was assessed on a case-by-case basis.

[–] AA5B 1 points 9 months ago (1 children)

There is transparency to the extent that the decision is based almost entirely on your credit score and credit record. You can see a copy of your credit record any time, which is a fairly new thing. You can see similar credit scores and if they turn you down for anything they are required to tell you what it was. While you may not know the calculation, you know what goes into it at least well enough. Most importantly the decision is mostly objective and consistent, by computer, driven by this data. It’s not entirely transparent but more so than at any time in history

[–] [email protected] 1 points 9 months ago

The decision should be based entirely on your credit score on record, which is determined by factors out of one's control.

You can assume what goes into your credit score, but the more important point is that you don't and that is proprietary information owned by a very small amount of companies that profit from your information.

Given the above, I can't come to the conclusion that determining your individual value based on circumstances out of your control is objective.

As for consistency, if you get sick and accrue hospital bills you can't immediately pay, your credit rating plummets. That doesn't sound very consistent, relevant, or objective.

[–] sosodev 1 points 9 months ago (1 children)

uh.. that’s exactly how it worked. The Wikipedia page you linked mentions credit bureaus. If you go to that page you can see they were established in the USA by the mid 1800s. Yes, it was all done on paper. That’s how the world used to work.

[–] [email protected] 2 points 9 months ago* (last edited 9 months ago)

No, that is not how it was done. Before, The time was put in to assess the relevant data your creditworthiness.

Today if you break a leg and have a hospital bill, your chances of receiving credit are automatically lowered.

There's a huge difference between being investigated for credit worthiness and automatically being assigned a score filled with arbitrary private data irrelevant to debt or credit.

Are you a racial minority? Your credit score probably isn't as good as a white guy's credit score.

https://www.federalreserve.gov/econres/feds/files/2022067pap.pdf

Assessing relevant data on an individual's debt risk makes sense.

Collecting everybody's private information so that three companies can determine, without ever meeting you or knowing anything about you, teally, the amount you are allowed to succeed or take advantage opportunities is b*******.

The 19th century credit bureaus and today's credit ratings are completely different.