Comment by gorgoiler | Hacker News Reader

Comment by gorgoiler | Hacker News Reader

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You bring your own data to each credit check.

It feels onerous as an idea because bank statements, monthly bills, payslips, will bequests, stock vests and trades, bank robberies*, and investment income each have different ways of being tracked. At least most of these records of individual financial activity come with a PDF these days. It wasn’t that long ago that applying for a loan meant scanning in papers for your lender to review.

Computers are smarter now. Not only can they read documents (or at least match the shapes against shapes they’ve been told are real) but they can also understand the contents too (or at least match the words against ideas they’ve been told are real.)

There may well yet be a future Data Valhalla where individuals hold their life.zip themselves, and upload whatever bits of it are needed to get that Nordstrom store card / car financing / cheeseburger loan without having an intermediate credit agency.

*I feel there’s a kernel of a joke there about a bank robber asking for a receipt with the loot in anticipation of declaring it on their tax return.

I don't see how this works in reality - The issue is that users wouldn't upload negative information (e.g. county court judgements or the bank robbery from your example).

Credit isn't like insurance where these things can be checked later during a claim (which can then be denied) - you need to know the person is a bad-payer before you send them the ten thousand dollar loan as that affects the terms, not afterwards when they default and you can't get your money back.

For CCJs and bank robberies, you'd upload a clean sheet from the government that gives a list of all CCJs and criminal convictions (in the UK we have a system called DBS for criminal records).

Potentially, with loans or other things, some kind of technical solution could work. You could have a personal document that you control, and you give permission for companies to write to the document.

With a loan, for example, if I give you a loan, I can also append to your document that I've loaned you the money; for every payment you make, I write to the log to say you've made a payment. If you stop making payments, I stop writing to the log. This would be cryptographically signed by me, so it can't be forged.

When you want to take out another loan, you can proactively share your document, the bank can see everything written on the log, and make a decision based on that.

Without some sort of central authority, surely this is just vulnerable to a rollback attack?

i.e. if I am a bad actor, and had just defaulted on a loan, why would the next document I send not be my copy of the previous 'clean' record before I got that loan?

Or what prevents me from sending out the same copy of the document to 10 other parties and getting 10 loans concurrently?

These are the sort of scenarios that the existing credit agencies prevent.

Then we follow it through and get to some sort of decentralised ledger to protect against these attacks, but that's then vulnerable to not being able to be expunged (how do we make sure it's possible to correct the record, as the CRA's are legally required to do when information has been written incorrectly).

So we end up with some sort of central authority.

Naively, credit is if you can pay, and if you will pay.

For the latter it’s whether you’ve had a judgment against you, which is a matter of public record.

For the former it’s based on how much money you have and what you spend, including on servicing existing debt. Lying about this would be fraud. In that sense, my proposal does indeed open up a new avenue for fraud but I don’t think that’s the same as it being unworkable!

I think this is quite a theoretical view, and in reality:

* The majority of missed payments and defaults don't end up as CCJ's, as often these are settled or just happen without going to court.

* Fraud being illegal doesn't stop people committing fraud on you. The idea is to prevent yourself from getting frauded.

So what. Maybe it is corrosive to society to provide unsecured credit willynilly. Yes, it makes the banks giant amounts of money, but IMHO consumer credit should only be a thing for two classes of assets (that can be repo'd easy-ish) real estate and vehicles.

The Western governments have horribly failed of caring for their people - cost of living are exploding, and at the moment way too many people are papering over that with unsecured credits backed by their data being free to exploit, and everyone else not willing of doing that is increasingly locked out of existence.

The point of the credit agency is to work for the lender?

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