Better credit scores will definitely net you a lower interest rate, though. Zero credit history is a major liability for lenders, so even small banks or credit unions with private investors will want some kind of benefit or incentive for taking on an increased risk of default.
The real fucked up part about credit scores is that it seems like it should be something the federal government regulates, but they don’t. For-profit companies do. And when they get hacked and expose all of your data so scammers can assume your identity for eternity, they can’t be held liable or responsible. All of that just so lenders can feel safer about who they give money to.
I’m actually part of a credit union and would recommend it to many people. The credit union didn’t get interest rates as low as what the big banks did a few years ago, but they’re also not as high as the big banks are currently.
One thing I really liked about the credit union was that they didn’t use my credit score when deciding my interest rate, they only checked it to make sure it didn’t have any glaring issues. Also I like that the credit union doesn’t sell my mortgage to a third party.
I also would recommend credit unions over banks. I have a local one that I use but I also have an account with PenFed, which is open to the whole nation and is one of the few places that offers a 2% unlimited cashback on everything no-fees card.
Regulate how? It’s a tool for lenders to decide if they want to lend or not, and on what terms. If the government was to make one, banks would still make their own because it’s for them to decide how to do business.
What would the government do? Prevent banks from using tools to make decisions?
Regulate how? It’s a tool for lenders to decide if they want to lend or not, and on what terms.
And also a tool for landlords to decide whether or not to rent to you, for insurers to decide what your rates should be, and employers to decide whether or not to hire you. It isn’t just about bank loans.
What about transparency? Sure, you can request a free copy of your credit report… once per year. Any more often than that and you have to pay. How do I dispute errors or inaccuracies on my report? How do the big three calculate my credit score? Why do each of them come up with a different number for the same individual despite sharing a similar set of parameters, and which one is used against me if I am denied for something on the basis of poor credit? What happens when they mishandle my sensitive data like my Social Security number, and what kind of legal options do I have to seek recompense?
You might be surprised to learn that the government does in fact regulate consumer reporting agencies. Ever heard of the Fair Credit Reporting Act? A lot of those rules came about from the systemic abuse of the clients of these credit reporting firms, including institutional racism.
The question is, why are these firms still allowed to operate as independent agencies and not as an apparatus of the state? What is the value of having these entities be private?
I don’t disagree that these services are necessary for our economy to function, and we can’t just tell people that they can’t come up with a system to determine loan risk for their clients, but there are some serious problems with the way credit scores work and how they are used in making certain decisions that should, in my opinion, be handled by an entity not concerned with making a profit off of their mostly unwilling clientele.
I think the way it could be approached would be for a government agency to start doing their own, force company to report the information to their service, and to provide the service free for individuals, and cheap for corporations.
It would then be relatively fair for individuals to be allowed to deny these companies the right to get their data
This way, the credit agencies would be free to do whatever they want, but they would have to step their game up, or just get obsoleted.
Better credit scores will definitely net you a lower interest rate, though. Zero credit history is a major liability for lenders, so even small banks or credit unions with private investors will want some kind of benefit or incentive for taking on an increased risk of default.
The real fucked up part about credit scores is that it seems like it should be something the federal government regulates, but they don’t. For-profit companies do. And when they get hacked and expose all of your data so scammers can assume your identity for eternity, they can’t be held liable or responsible. All of that just so lenders can feel safer about who they give money to.
I’m actually part of a credit union and would recommend it to many people. The credit union didn’t get interest rates as low as what the big banks did a few years ago, but they’re also not as high as the big banks are currently.
One thing I really liked about the credit union was that they didn’t use my credit score when deciding my interest rate, they only checked it to make sure it didn’t have any glaring issues. Also I like that the credit union doesn’t sell my mortgage to a third party.
I also would recommend credit unions over banks. I have a local one that I use but I also have an account with PenFed, which is open to the whole nation and is one of the few places that offers a 2% unlimited cashback on everything no-fees card.
Regulate how? It’s a tool for lenders to decide if they want to lend or not, and on what terms. If the government was to make one, banks would still make their own because it’s for them to decide how to do business.
What would the government do? Prevent banks from using tools to make decisions?
And also a tool for landlords to decide whether or not to rent to you, for insurers to decide what your rates should be, and employers to decide whether or not to hire you. It isn’t just about bank loans.
What about transparency? Sure, you can request a free copy of your credit report… once per year. Any more often than that and you have to pay. How do I dispute errors or inaccuracies on my report? How do the big three calculate my credit score? Why do each of them come up with a different number for the same individual despite sharing a similar set of parameters, and which one is used against me if I am denied for something on the basis of poor credit? What happens when they mishandle my sensitive data like my Social Security number, and what kind of legal options do I have to seek recompense?
You might be surprised to learn that the government does in fact regulate consumer reporting agencies. Ever heard of the Fair Credit Reporting Act? A lot of those rules came about from the systemic abuse of the clients of these credit reporting firms, including institutional racism.
The question is, why are these firms still allowed to operate as independent agencies and not as an apparatus of the state? What is the value of having these entities be private?
I don’t disagree that these services are necessary for our economy to function, and we can’t just tell people that they can’t come up with a system to determine loan risk for their clients, but there are some serious problems with the way credit scores work and how they are used in making certain decisions that should, in my opinion, be handled by an entity not concerned with making a profit off of their mostly unwilling clientele.
Lots of good points you’re making there.
I think the way it could be approached would be for a government agency to start doing their own, force company to report the information to their service, and to provide the service free for individuals, and cheap for corporations.
It would then be relatively fair for individuals to be allowed to deny these companies the right to get their data
This way, the credit agencies would be free to do whatever they want, but they would have to step their game up, or just get obsoleted.