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Comment by orange_county | Hacker News Reader

Seems like the credit and banking industry is so dependent on the credit bureaus. Is there a way we can have credit cards, loans and mortgages without the need of centralizing pii data?

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Sure, we could all pay interest rates that are based upon some amalgamated average risk profile, so you end up subsidizing deadbeats who don't pay their debts.

As someone who pays their credit card off in full every month, that would be fine with me. I never pay interest.

It's not only about credit cards. Mortgages, car loans, working day loans, etc. as well

Would that be more or less expensive than subsidizing the credit reporting agencies shareholders desire for aggressive growth?

I don't know. But in the proposed scenario, credit reporting agencies wouldn't exist at all.

We could have each bank (and so on) store the information you give them and allow requesting people to pull from every agency.

That really just creates a lot of little credit bureaus, which fixes the centralization issue at least.

This seems like a legitimate use-case for permissioned ledgers where various lenders have necessarily siloed lending history data but also have an interest in seeing what data everyone else has for prospective lendees.

In the longer run, you can imagine not just credit history data being exchanged (with the permission of the borrower perhaps) but also the ability to trade the loan products themselves, most of which is done OTC right now. Fixed income contracts can be described as "smart contracts" [1]

[1] https://lexifi.com/files/resources/MLFiPaper.pdf

That doesn't really fix any security issues, though, it just makes it easier to express who should have permission to access your data. Any system is still vulnerable with, say, a server configured with the credentials admin:admin.

But would that allow me to conveniently omit any negative info from future credit applications? The banks would quickly start sharing this info with one another and become de facto CRAs themselves.

I'm sure blockchain will magically solve that problem!

(If you're not laughing then you need to admit you have a problem)

I don't understand why they're proposed as a solution to this type of problem at all. I'm a big fan of blockchains, I work for a company/project completely reliant on them, but I don't get where people think they'll be useful for things like credit monitor and health care records. It makes no sense to me.

Just to play devil's advocate, since I don't think they are a good solution either. Unlike healthcare I think you could use some of the properties of a blockchain to help reduce the risk of leaking personal information during credit checks. For example: you could prove your identity by making a transaction and then show a timely series of past payments.

> If you're not laughing then you need to admit you have a problem)

Recognizing the most repeated joke on HN?

blockchain

That would mean that instead of the data being in a single centralized location it's on every single node. That's the opposite of what we need.

Edit: Assuming the colloquial use of the term "blockchain", a public database. In the sense that a blockchain is simply a data structure it's not necessarily a problem but also not a solution.

No, the idea is that it's under collective control.

Why would you as a consumer want collective control over your data? Why should anybody but myself be able to affect my own credit?

That isn't how a blockchain works.

Great explanation /s

Please tell me how a blockchain works then.

Ok, sure. Why does having a public ledger imply anybody can control your data? Can I take your Bitcoin? You're being outright stupid tbh.

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