Hacker News Reader

Comment by nimbius | Hacker News Reader

A cogent argument could.be made that transunion, Equifax, and other big private credit clearinghouses act as direct agents of an unspoken american "social credit" system in which the credit score denies housing and employment to those who refuse to or cannot conform to a largely invisible tome of rules. These agents are then unpoliced as they serve capitalisms direct need for an underclass.

Full disclosure: I am a communist, and recognize most Marxist state social credit systems tend to have the same effect. Transparency in the plenary party sessions seems to do little to reform this cudgel but the parallels in capitalisms version are neat to me.

View on HN

I see where you're coming from, but on the other hand, the biggest rules are well known and quite simple: If you take a loan and pay it back on time, you'll have high credit. If you fail to meet your obligations, you won't. The existence of an underclass which is constantly on the edge of not being able to pay their bills is true though.

I agree with you on the current state, but I think parent may be concerned about future state where unelected, private entity determines your societal worth based on yet unknown rules; or known, but less bound by 'loan paid off' type of information. Right now, it appears to be mostly limited to various financial events, but current state is not guaranteed not to change in the future.

> future state

GP's comment was written in present tense.

Those are not the only rules though... you can have low credit for not taking out enough loans and not having debt. You get dinged for opening and closing credit card accounts too quickly, even if you've never missed a payment.

Your score goes down if you simply inquire about loans a bit too often...

All of these are "rules" made up unilaterally by the credit bureaus.

I have a few credit cards that I no longer use. If I cancel them my score would go down because the average age/length credit history would go down.

Not by that much, but it is surprising that leaving these cards open is incentivized whereas the more secure and less risky thing to do would be to close those accounts.

It make a a bit more sense when you think about it - Risk isn’t really the main thing incentivized here, making interest payments is haha. Risky lenders don’t make payments, but neither do people who never take on debt

Credit scores actually are designed to measure risk, not interest payments. Otherwise high credit utilization would be a positive:) There are certainly edge cases where the score has low predictive value, but overall the correlation between credit score and risk is quite large.

The closed card drops off your account history after ~10 years, so your score shouldn't immediately go down. Technically, I'm not sure that the credit scores can differentiate between you closing a card and the bank closing your card (the latter might be some sort of signal of potential change in creditworthiness)

In general, credit scores are optimized for the average consumer - and so behaviors around the edges don't always make sense in terms of your score going up or down. If you think about the system that was replaced by credit cards (i.e. keeping a tab open with many different stores), you'd be hard pressed to say that the amount of credit extended is lower now (overall), than under the old system. Whether that's a good thing or not is a different question.

In general, your score would immediately go down as your credit utilization would go up (outstanding balance over total available credit).

0/infinity is still zero

…depending on the languages used in their backend and the quality of their development efforts…

The balances are instantaneous balances, not ones that are being financed. So, if you use and pay off your card every month (as makes sense to me for points/cash back, ease of chargeback, and convenience), then your numerator won't be zero on most days. (For me, it's not $0 on any days, because of the timing of statements.)

You could theoretically pay off the card before the statement posts to keep the balance at zero. Usually not worth it, but if you want to boost your credit score before getting a mortgage, that trick usually works.

In Canada, Equifax et al tend to reduce score at each over 80% revolving credit account utilization.

Those are minor and often temporary dings compared to not paying back loans on time or at all. For example, if you don’t have a loan history, your score isn’t low enough that you can’t get an apartment or get a car loan. Then by doing those things you can build credit. The other things, open and closing accounts too quickly, or making lots of loan inquiries over a short period of time, lead to temporary dings that recover in a few months (they just throttle your credit). The rules are not explicit enough I agree, but it’s not like most of them couldn’t be covered in a high school financial literacy class.

Almost everyone significantly disenfranchised by bad credit are actually for things that would obviously lead to bad credit (to their fault or not; i.e. identity theft could be involved).

> if you don’t have a loan history, your score isn’t low enough that you can’t get an apartment

This is not true. Many places will deny an applicant for zero loan history, effectively forcing people to get a credit card in order to obtain housing.

Technically, people with no credit history aren't denied for having low score -- they're denied for not having a score at all.

That never happened to me when I came back from China (unable to get a credit card for 9 years because I didn’t have a Chinese ID card, so no credit history within the 10 year window they keep track), nor did it happen to my wife, who obviously didn’t have any history as a new immigrant. We didn’t have problem getting a rental with proof of job/income. And without the job/proof of income, even with 10 credit cards, many of these places won’t rent to you regardless of your credit rating given eviction laws.

I get it, there must be some place that denies rental based on lack of credit history, but I would guess it is so rare that you’d have to stretch really hard to find an example.

Correct, but a nitpick: it's not quite an issue (as the parent said) of the score being low per se. From my own experience, in the time when I had no credit history, when I went on annualcreditreport.com or the alternatives, it would happily tell me that I had a credit score of 720-740, but any time I would apply for an apartment, or even the most usurious credit department store credit card, I would get rejected.

So yes, the lack of a credit history makes you look artificially like a bad risk, leading to rejections, but not because the system reports you as "normal person with low credit score" -- that would actually be an improvement!

For those who want to know, I eventually got out of the catch-22 by following up with the service department of a financial-advisor-affiliated credit card, and answering some questions like about employment history.

On the contrary, the actual rules and methodologies for credit score calculations are not documented anywhere public.

Saying essentially "just don't do bad things to your reputation" is at most a very hand wavy "rule of thumb", but it's not a codified "rule" of the sort we should expect to see of such a consequential system.

> On the contrary, the actual rules and methodologies for credit score calculations are not documented anywhere public.

The exact formulas might not be, but the general factors aren't exactly a secret. Hell, the "free credit score" service my bank offers even provides a simulator tool to estimate what would happen to my credit score if I did certain things (eg. get a car loan, or pay off an existing loan).

Many people I’ve talked to have very little idea what the factors affecting their credit scores are. Many are unaware or uninterested. I have helped many people improve their credit scores because I have spent hours learning how to game this system. Much of this information is not taught to people until they need credit at which point it’s too late to start establishing a history and your best bet is some bs predatory card that locks up more money than you can afford.

Have you thought about publishing your tactics in gaming the credit system?

There are already tons of articles and videos that have already been published on this. And now Experian / other bureaus offer score breakdowns along with calculators where you can explore how hypothetical actions would affect your score. I think the space is pretty well covered:)

(For an example, Google for AskSebby - How to Increase Your Credit Score)

Just tried it and received a 404

Google Search: AskSebby - How to Increase Your Credit Score

First AskSebby result. https://www.asksebby.com/blog/how-to-improve-your-credit-sco...

I'll keep digging.

As someone else mentioned there is a ton of existing content. The problem is people don’t look until it’s too late because nobody cares about this stuff until it causes issues. Unless schools start teaching real life financial basics the problems will continue.

Credit Karma has been one of my most useful resource for improvements because they break down the factors very well. Many banks have stepped up their game but some don’t give you as much detail.

No, that isn't even remotely how it works. My credit score has gone down consistently after getting rid of all my debt.

If you understand how credit scores work, you'd realize that what you've experienced doesn't contradict the parent's claim. Specifically, having low credit utilization (ie. low credit used compared to available credit) and high diversity of accounts is beneficial for your credit score. Closing accounts is bad for both of these, hence why your credit score dropped. It doesn't invalidate the parent's claim that you can have good credit by just using credit and paying it back on time. FWIW I have a few credit cards that I pay on time every month, and my credit score is pretty good.

My credit is tanked from an ex opening up accounts in my name and running up the tab while I was being treated for leukaemia and Crohns. Six years later and I’m still fixing the damage.

Fucking hell, why are people such monsters? That’s terrible to hear, hope you’re doing alright.

[deleted]

I think it’s fairly clear the monster here is the ex that took advantage of a vulnerable person.

Question from someone not in the us: can you legally open a creditcard in someone else's name or does it have to involve some form of fraud?

I'm pretty sure my application was only valid when signed by the requester by that was in Europe and rules may differ. I do know you can open them for shared accounts, but that is not what I am talking about.

It was/is fraud, yes. Typically the way you open a card in someone else’s name on your account is by adding them as an authorized user.

> If you take a loan and pay it back on time, you'll have high credit.

Unless you're on the Equifax blacklist. Journalists who wrote anti-equifax articles tend to find their way there, as do ex-girlfriends of upper management. And conversely women who do NSA hookups with a VP or above tend to find their way onto a whitelist that boosts your credit score by 150 or so - it's considered an unwritten perk of the job.

(The above is purely speculation, I have no idea whether any of it is actually true, but honestly, why wouldn't it be?)

This is a good reason for most finance companies to take the middle of the 3 scores.

That helps some, but realistically it's a small industry and there are lots of channels (formal and otherwise) linking the competitors. A lot of people working at one previously worked at another.

My parents taught me that debt was bad. They told me that credit cards were traps to get you into debt, that preyed on poor impulse control, and that it was better not to have one. If you can't tell, my parents grew up in a time when the credit score system didn't really matter, and didn't understand it.

I did not get a credit card. I did not have any loans, for school or anything else.

My credit score wasn't even a number, it just didn't exist. Even the bank I banked with, which could see that I had more than $8k USD deposited monthly, that could see I had $30k in an account with them, would not give me a loan to buy a car.

Even if I were to get a credit card and pay it back on time, my credit score would be quite low due to having no history, and I still could not get a loan.

I'm fortunate that the apartments I have rented so far have not done credit checks, only background checks and looked at salaries / offer letters, but there are many apartments I simply could not rent since I would obviously fail their credit check, despite never having had any debt.

>My credit score wasn't even a number, it just didn't exist. Even the bank I banked with, which could see that I had more than $8k USD deposited monthly, that could see I had $30k in an account with them, would not give me a loan to buy a car.

Right, because it's a credit score, not a finance score. I'm not sure what you want here. Do you want credit bureaus to collect even more information about your financial life so they can have a more accurate picture?

I see this as an education problem. People need to be taught the specific rules of credit scores in addition to general personal finance.

I feel like my parent's point about credit cards and college loans being bad were correct though.

Like, I believe they're right that going to college on a full-ride scholarship was better than going to a more expensive one on a loan.

I also believe they're right that credit cards are bad. Like, banks make money on credit cards by: 1. hoping you miss a payment, and collecting interest, and 2. charging merchants, thus raising the price of goods for everyone (typically)

I guess you're saying that we should teach people "Yes, use credit cards, these tools designed to put you in debt, but be careful. Why use something designed to put you in debt? Because there's another private company that will punish you by not letting you rent certain apartments if you don't use a credit card"

I wish I had parents like yours.

Overall, credit is not advantageous to most people that use it for consumerism. Credit should only be used for investments with a commensurate return above the interest rate.

100% this.

My parents were quite well off, and my dad often times tried to get me to use a credit card, not because it was free money (i was very well financially educated by them) but because things like credit scores do get checked by employers (sometimes) or housing companies to determine all sorts of things, so it would make sense to buy 1-2 small things (say, like a pack of gum or a sandwich) a month on the card to immediately pay it off, so the credit score would be good.

I protested, and to this day have never owned a credit card. I live within my means, don't splurge on stupid shit, and do money-saving things as much as I can. I don't own a car, and since I'm fortunate to live in a dense city in a warm environment, I can walk almost anywhere at any time of year. There's also free public transportation.

The only "credit" I have is a small amount of margin I have in my trading account, which I only use on topping up low-risk, dividend-paying investments that I also sell deep OTM calls against. It's a slight risk, yes, but it's as delta-neutral as I can get while still making consistent money.

> Do you want credit bureaus to collect even more information about your financial life so they can have a more accurate picture?

I mean, if instead it was the government, and they could also draw information about my salary, yeah, that sounds kinda nice. Not having to own a credit card to prove that I exist to a landlord does seems pretty good to me.

But my overall point here is that a credit score is not as simple as the above poster made it sound. Someone who's been financially responsible can still run into issues because of this weird system leaking into so many places.

> Right, because it's a credit score, not a finance score. I'm not sure what you want here. Do you want credit bureaus to collect even more information about your financial life so they can have a more accurate picture?

To some extent _yes_, if that's how this has to work. If my ability to make significant life steps is based entirely on their view of my ability to pay debts then I would rather they at least have the full picture. As it is it's extremely inconsistent, one place I rented reported my rent payments to some of the credit bureaus (but not all of them), the others did not. Additionally utility bills don't appear, despite them probably being a reasonable gauge of whether you can pay for stuff on time (at least as reasonable as everything else they use).

It is what it is, but I was in that poster's same position and agree with them that it feels like a very dumb situation. I'm lucky that I at least saw it coming and a few years before buying a house I opened a credit card with the only purpose being to build my credit history. I have one thing that charges about ~$8 a month to it and it gets auto paid, and apparently _that_ was a big key to determining whether I'll be able to manage paying for a house. IMO that's just silly.

Same here, but it has not been a problem with good job and finances. Buying a car or renting apartments.

The difference in the US financial system of credit and a "social credit" system is that these systems measure only attributes about financial credit, and in fact, the US has laws that specifically forbid many social factors from being used.

Additionally, many executives are virulently opposed to people working multiple jobs and are using things like The Work Number to identify and fire remote workers who have more than one job.

Even in our most dystopian RAND-suggested bedtime story vision of a "communist hellhole", those proles who happened to possess a ruble when they got to the front of the breadline could buy a loaf. In the supercapitalist future, all transactions will require the approval of more than the two involved parties. Good luck buying anything if you ever express skepticism toward the great and powerful credit bureaus.

Perhaps I'm misunderstanding something about the point you're making, but in 2023 the third party creditor already must approve any transactions where credit is extended (e.g. credit card)

Credit bureaus remain uninvolved with cash transactions since, er, well, there's no creditor to be concerned about creditworthiness? I don't see how "supercapitalism" changes that

You haven't seen any of the anti-cash propaganda, some of it here on HN? The interests behind that are also behind several other disturbing changes.

Square peg, round hole. Has nothing to do with credit bureaus.

If you replace "Credit Bureau" with CBDC (Central Bank Digital Coin) it would ring very true or the probable future.

Alright, that's a little bit different, but doesn't that just imply that Bitcoin or Monero become "cash" in case you need to Do Some Crimes?

>Even in our most dystopian RAND-suggested bedtime story vision of a "communist hellhole", those proles who happened to possess a ruble when they got to the front of the breadline could buy a loaf. In the supercapitalist future, all transactions will require the approval of more than the two involved parties

What's preventing a "communist hellhole" from implementing something similar? Is it something about state ownership of capital that prevents a third party from interfering in two consenting parties from engaging in transactions? Actually, now that I think about it, aren't communist regimes pretty famous for shutting down markets? Isn't that a variant of "all transactions will require the approval of more than the two involved parties"?

What's preventing a "communist hellhole" from implementing something similar?

Nothing? I referred to a fantasy, not reality. (Don't get confused.) It's possible I missed one of the cautionary tales I was supposed to catch to truly inculcate the proper American fear and hatred of foreigners. If you can point me to some 1980s-era capitalist propaganda that features this particular horror, I'll concede the point.

Back in the real world, it seems possible that e.g. China already has this, or will soon. I wouldn't take either side in the "is China communist?" argument, for fear of offending. I don't care very much, because I don't live in China. I'm concerned with the particular drain that my own nation is circling. You apparently share my apprehension; otherwise you would have argued that this wouldn't happen here rather than that it will also happen there.

It seems weird not to name Experian. Aren't there only three?

There's actually 4. Innovis

There are a bunch of other types of reporting agencies too, not just for credit:

https://www.consumerlawfirm.com/credit-reporting-agencies.ht...

https://www.consumerfinance.gov/consumer-tools/credit-report...

Yeah I've had difficulty renting apartments for 8 years because "LeasingDesk" falsely reported that I owed a past landlord $36,000. No one ever told me this is why my applications always faced long delays, additional scrutiny, increasingly insane documentation requirements, and huge security deposits.

Finally I asked my most recent apartment complex "WHAT THE FUCK IS GOING ON?" and they were like "uhh this report..." and I spent 3 months getting LeasingDesk to deny, deny, and finally admit/accept my claim that they had bad data.

It was a nightmare to get it fixed. They just said "No, the data is correct because we called your old apartment complex and they said it was correct." Because LeasingDesk was acting in good faith I could only sue my old apartment complex for misreporting it, I couldn't use CFPB to force LeasingDesk to fix it.

So yeah, its not just Experian/TransUnion/Equifax....there are dozens and dozens and dozens of data brokers acting as credit bureaus. Right now the only protections consumers have from them come from the CFPB but if that's ever abolished we'll only have lawyers and torts.

And before that large companies would keep their own records. My dad needed to put down a 3-figure deposit for his first phone line in the 70s because someone with the same first name and last name who lived in the same town as he went to college regularly racked up over $100 per month in long-distance bills.

If “paying you debts” is an “invisible tome of rules” then I’m all for it.

Let’s be honest, credit score pretty accurately reflect what they are supposed to measure - credit worthiness.

I would not loan someone thousands of dollars on a "trust me bro", so I wouldn't expect banks to either. Corruption of the authority judging trustworthiness is bad, but there just needs to be an authority doing this.

The real problem is more likely that wages and living expenses are not in sync, which just fucks over the poor people. Using credit to avoid literally dying on the street is more a symptom of wages making no sense.

It's sad. I don't like it either. I don't trust these people either. Equifax fucked me and millions of others, and I got a check for $5.21. There is no justice and there never will be.

> there just needs to be an authority doing this

People will tolerate even the harshest laws if they feel like they are applied fairly.

But in this case there is no published rule book, and no published methodology for calculating credit scores. There is not even the most basic transparency.

Don't get me wrong I'd love to see the rule book too. Would you trust the rules though? There will always be the mysterious few with the power. I wish we could just have nice things without corruption :/

> Would you trust the rules though?

Rules don't need to be trusted, they need to be written down and available for reading.

A reasonable take if you ignore how this system reinforces existing inequality + the ways this system is used outside its original scope.

Also you have to admit it’s kind of fucked up that there’s no total opt out mechanism.

It's also super Kafkaesque, because there is no way for you to know why your score is exactly what it is. There is no published rule book or methodology.

Yep. It’s all a secret. You are measured by an invisible system that you can’t opt-out of, can’t question… oh and just in case you thought you could learn from experience, here comes a newer “version” of the score that determines whether you’re allowed to build equity or whether you’re relegated to paying someone else’s mortgage.

That makes no sense.

How does “checking if people are credit worthy” reinforce inequity? If you can’t repay, you shouldn’t be taking on debt. If anything it prevents people from taking on debt they can’t afford, stopping them from further inequity.

And you can opt out. Don’t use credit at all. (edit: of course a credit record will still exist, but it won't matter if you don't use credit)

This sounds like a bunch of people complaining “why can’t I just borrow whatever I want without people checking whether I can repay?”

> And you can opt out. Don’t use credit at all.

Nope. Whether you use credit or not, the credit bureaus collect information about you and share that with all manner of other companies, including employers.

Also these systems have inherent racial biases.

https://www.forbes.com/advisor/credit-cards/from-inherent-ra...

But if you don’t use credit the system any rating has no impact on your life?

Again, this seems like people want low interest borrowing without the “icky” problem of having to answer for their past failure to pay debt.

The world doesn’t work that way.

You seem concerned with a “moral failures” aspect of debt, which doesn’t make for an interesting discussion. If you’re not interested in the complex system of algorithmic finance and its intersection with poverty and generational wealth, I’m not sure there’s much of a discussion here.

I already mentioned that some well paying jobs (the kind that people stuck in debt traps would most benefit from) require an active credit score to obtain. So “not using credit” is not an option. As well, credit is a primary way that the people who hold generational wealth got that wealth. Oh, and they run the system.

You’ve created a straw “poor person” and insist on shadow boxing it. If you ever decide to confront the complex systems that these fellow humans face, I encourage you to read up on the modern credit system. Wikipedia has a good rundown with active sources.

There are no "moral failures" so I'm not sure where that comment comes from.

Either you can pay your debt or not. If you can't, others will use that to infer other things about your suitability for various things like jobs.

The credit score isn't the issue, it's just the medium for transmitting information. Background checks can uncover the exact same issues. I can call your neighbor and ask if what kind of a person you're like and decide not to give you a job based on that answer.

That's just life - actions have consequences.

You're assuming the database is 100% accurate, and people never have their identify stolen. Which is demonstrably false.

No I’m not. Accuracy has nothing to do with my argument.

And no system is 100% accurate, so your point is moot anyways.

If you actually understand that then how can you still hold that position?

Anyway, your argument's been refuted more eloquently than by me, so I'll leave you to it.

> A reasonable take if you ignore how this system reinforces existing inequality

Sure, it "reinforces existing inequality" but what should we do about it? I'm pretty sure punishing people for stealing stuff "reinforces existing inequality", but does that mean stop doing that? Giving high paying jobs to the most qualified candidate also "reinforces existing inequality", but does that mean we should allocate jobs via lottery? Many things "reinforces existing inequality", but they exist for a reason. "reinforces existing inequality" is just a thought terminating cliche.

> the ways this system is used outside its original scope.

What are some examples?

>Also you have to admit it’s kind of fucked up that there’s no total opt out mechanism.

I mean, you can sort of opt out by refusing to give consent for people to run credit checks on you. The problem is that if you don't they assume you must have terrible credit, so you get denied for a lot of things.

> credit score pretty accurately reflect what they are supposed to measure - credit worthiness

Do they?

If that was true, how could we verify it, beyond an initial gut feeling? There is no published rule book or methodology for credit score calculations!

I get what you are saying but you are not the customer. The customers are lenders which rely on these scores to make lending decisions critical to their business.

Presumably these lenders find these scores accurate enough to prevent enough bad loans while not turning away too many credit worthy customers.

That said, obviously the models can be improved with more data. I worked for a lender for a while whose edge was giving people a slightly lower rate (or lending to some folks that just missed the cutoff with other lenders) because we thought our model was a bit more accurate than the credit scores / models used by other lenders.

But even we admitted to ourselves that these were just marginal improvements, by and large the credit score is a super meaningful indicator.

> Presumably these lenders find these scores accurate enough to prevent enough bad loans while not turning away too many credit worthy customers.

And this is precisely the point. If there was an error in your score, you'd have no way of knowing, no reasonable basis for any appeal, and it just sucks to be you. Lenders don't care if individual scores are accurate, they only care about whether they're making more money than they're losing.

It's analogous to doing AI gender prediction: it works fine in the aggregate, but you run into issues at the individual level, and it's the individual's rights that I care about.

// If there was an error in your score, you'd have no way of knowin

I don't think that's true. I remember many years ago getting a free credit report on myself (it may have been a free trial from a monitoring service but I believe you can also just get it from the agencies itself)

You get to see the data that is factored into your score. Anything that majorly dings your credit should be obvious (eg Experian thinks you are delinquent on something that is actually paid off)

I never had to deal with that but likely the error then is with the reporting bank so you call them to fix the issue.

Is there a reason you think this isn't possible?

You can know in the most obvious subset of cases of error, but if your score is 573 and it's supposed to be 605, good luck figuring that out.

> Is there a reason you think this isn't possible?

The methodology for the calculation of credit scores is secret. You can't go on the internet and figure out how they do it. They don't tell you, they don't publish it, you can't know. Therefore you don't have the ability to check their work.

I understand what you're saying, I just think it's mainly a contrived scenario. Minute differences in the score (573 vs 605) don't really impact you and there's nobody trying to replicate the calculation to make sure they get whatever it's "supposed to be" - whatever that means.

The more likely scenario where someone is going to troubleshoot is "I paid off all my debts and have a lot of unused credit, how come my score is too low for mortgage lenders to talk to me" - and likely a gross mismatch like that is going to be obvious.

They give you a pretty meaningful guide on what to look for in determining your score [0] that should be enough.

Note, I am not arguing that I think it's good the exact formula is not known, I just think it's not a real problem for either the lenders (who are the ones who actually base their business on this data) or the consumer.

[0] https://www.myfico.com/credit-education/whats-in-your-credit...

> Minute differences in the score (573 vs 605) don't really impact you

Don't they, though? How do you know? For a person who gets refused access to some important service or product because they're just 1 point under some arbitrary and unknown threshold, yes there's an impact.

No, they don’t make a difference.

Generally credit scores falls in wide bands that give a general credit risk.

573 vs 605 are both very high risk and you’re getting slammed regardless.

The scores are no more arbitrary than the requirement that bankruptcies roll off your score after 7 years. It’s not 6 years, or 6 years and 364 days, it’s 7 years and yes being on either side has a massive impact.

> 573 vs 605 are both very high risk

Those were just random numbers I made up. With only a little bit of imagination, you can consider the significance of other number discrepancies.

> You can know in the most obvious subset of cases of error, but if your score is 573 and it's supposed to be 605, good luck figuring that out.

Presumably you're talking about the case where somebody never checks their credit report, goes out to get a car loan or whatever, and gets a worse interest rate because there's an error on their report. My question is, what are they supposed to do? They're already required to give you a free report per year. There are various services that give you your score and report for free multiple times per year. I guess a push model would work better, but would you want all the credit bureau to send you a letter to your address on file every time your credit report changes?

> what are they supposed to do

Just because I haven't been repeating myself enough, the first thing I'm suggesting they could do is publish their credit scoring methodology.

Your comment is irrelevant to what I said.

>the first thing I'm suggesting they could do is publish their credit scoring methodology

What's that supposed to accomplish? At the end of the day, a credit score is ultimately supposed to tell the lender what % chance you're going to default. Suppose the data is already accurate (remember, you can already request your credit report to check whether it's accurate), what additional value does having the methodology provide? Are you doubting their ability to correctly execute the model? Or do you want to dispute the fact that their model gave you a credit score of 573 when you think it should be 605?

As far as I understand (not a US citizen), the biggest thing people seem to do is: -get a credit card -do your normal shopping with it But this just seems nonsensical to me, sure if you can't pay your shopping cart, a mortgage is very likely a bad idea. But what predictive value is there in this score besides that? For individuals it seems more useful to just ask payslip info instead of some weird arbitrary number to get the feeling if someone can pay you.

The issue is the rules include things like lowered scores after paying off a home loan and companies are using these scores for things that have nothing to do with the likelihood of paying back a loan.

They don’t even do a very good job of what’s intended as people can literally have an 800 score the week before declaring bankruptcy.

It's a score, not a fortune teller. It's for financial modeling, and only one thing of many that lenders look at.

The entire point of a credit card score is to predict the future.

Being bad at that because of inherent inaccuracies in their methodology is a problem.

>Being bad at that because of inherent inaccuracies in their methodology is a problem.

The parent poster already mentioned that it's "not a crystal ball". It doesn't have to be perfect. Sure, there are some edge cases where it fails, but if it works 99% then it's good enough. On the flip side, do you really want a minority report like system that can predict your future credit with 100% accuracy?

99% accuracy is wildly overstating things. With low enough accuracy such predictions become actively harmful.

I would argue it's not completely unspoken. But it's not spoken loudly enough. Pass it on.

Reply on news.ycombinator.com