Saying "Wasted" On Facebook Can Affect Your Credit Score (ajc.com) 386
JustAnotherOldGuy writes: According to a recent report by the Financial Times (paywalled), some of the top credit rating companies are now using people's social media accounts to assess their ability to repay debt. "If you look at how many times a person says 'wasted' in their profile, it has some value in predicting whether they're going to repay their debt," Will Lansing, chief executive at credit rating company FICO, told the Financial Times. "It's not much, but it's more than zero." According to the Financial Times, both FICO and TransUnion have had to find "alternative ways" to assess people who don't have a traditional credit profile — including people who haven't borrowed enough to give creditors an idea of what kind of risk they pose.
I have no debt and a hefty savings account (Score:5, Insightful)
Re:I have no debt and a hefty savings account (Score:5, Informative)
This entirely.
The credit systems is quite screwed up. I worked a shitty McJob full time during summer and part time during school (except for the last year where I decided to focus on my studies). Managed to be one of the very few people with a degree and no debt without Mom and Dad paying for it.. and was proud of this. Got a decent job, was still living at home so built up some decent savings, payed for most stuff with cash or debit. Eventually decided to get a credit card, and yup, had to deposit a chunk of cash that I couldn't touch for 6 months before they'd give me one. This would seem entirely reasonable to me, except by this point my sister was in university.. student loans (in her defense, her program was many times more expensive than mine..), and no income (she worked summers but not during the school year).. and banks (including mine, RBC) were practically throwing pre-approvals at her.
Fast forward about 10 years, I now own a house, have a mortgage, a line of credit, credit cards.. basically if I added up all the credit I have available to me it would be multiple times what I make in a year) .. and I get calls all the time from the big banks trying to give me even more.
There was a good(ish) documentary a few years called Maxed out on Debt... if you ignore the annoying drama stuff in the middle, there's some good frank interviews that explain a lot of it. They _want_ people who arn't completely broke but can't afford the credit so they'll keep making minimum payments forever. They want to load you down with more credit than you can afford so you get on that treadmill.
I'm kinda on the fence with regards to how I feel about this. One one hand, the banks are doing some shady stuff and directly trying to set people up for financial disaster for their own benefit. On the other hand, they arn't forcing people to use their credit cards beyond their means. Personally I've managed to never pay interest on any of mine. I guess it's gotta be a middle ground. Much as I hate nanny-state type stuff, I feel like this is one area we may need the government to come in and save people from themselves by restricting how much credit a person can hold based on income or something.
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They _want_ people who arn't completely broke but can't afford the credit so they'll keep making minimum payments forever. They want to load you down with more credit than you can afford so you get on that treadmill.
I'm kinda on the fence with regards to how I feel about this. One one hand, the banks are doing some shady stuff and directly trying to set people up for financial disaster for their own benefit.
Yep, every dollar of debt you take puts $10 back into the sytem which they can then lend out to ten more suckers. Gotta love it.
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Agreed. We've paid off everything every month for well over a decade, pushing two. They love us. The reason is -- they get money from the merchants just for us using the cards. (The original business model of the cards, long before exorbitant interest rates and penalties.)
They especially love us when we run large items through a card and pay them off.
Considering most good cash back or points cards give roughly 3% of the value of the purchase back to the card holder, that would indicate to me that the merch
Re:I have no debt and a hefty savings account (Score:5, Insightful)
> On the other hand, they arn't forcing people to use their credit cards beyond their means.
If you look at a lot of the ads that they send us, those ads suggest strongly that they're making the offer because it *is* within your means. These people with advanced math degrees say you're a great person to get this credit... it's easy to start thinking they understand something about your finances that you've missed if you don't really grasp the terms "compound interest" and "APR" etc. I think the sales pitch often crosses the line into dishonesty. Not always, but frequently.
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they're making the offer because it *is* within your means...
to pay the monthly minimum. Which is exactly what AC wrote.
Re:I have no debt and a hefty savings account (Score:5, Interesting)
I too have 800+ credit scores, very good savings, and a paid-off home. Therein lies the problem. I don't have any debt any more, and while I use credit cards for nearly everything, I never carry a balance beyond the payment due dates. I've been retired for a while and have a steady pension income that is quite adequate.
So I asked for an increase in my credit card limit, and was turned down, with the EXPLICIT statement, "You don't have enough debt." Not "your credit isn't good enough"--- they as much as said my credit was just fine.
In other words they see that in their industry I am, and will remain, what is called a "deadbeat." This does not mean a non-payer, this means someone who PAYS and doesn't carry balances, thereby denying the banks the opportunity to collect interest at extortionate interest rates.
Is there something wrong with this whole system?
Re:I have no debt and a hefty savings account (Score:4, Informative)
with the EXPLICIT statement, "You don't have enough debt."
Maybe what they really mean is "our actuaries have discovered that people who don't carry any debt but suddenly ask for an increase are statistically more likely to skip out".
Is there something wrong with this whole system?
Depends on what the purpose of "the whole system" is.
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Credit cards aren't a system to make payments easier, they are a system to make getting credit easier.
If you're only using them for payments, they're not making money off of you (or atleast not a lot).
Getting a bigger credit limit only to use it for larger payments just means you cost them more.
Re:I have no debt and a hefty savings account (Score:4, Informative)
Credit cards aren't a system to make payments easier.
Except they are. Credit card companies charge merchants fees in order to be part of their network. As long as you are spending with their cards, they are making money by having you as a customer regardless of the fact that you are not allowing your balance to incur interest.
Rewards card (Score:3)
The $3 (or whatever) transaction fee goes to the transaction processor for handling the transaction. The interest payments (if any) go to the lending institution (for actually putting up the money that gets loaned out).
Not all of the transaction fee goes to the transaction processor. A fraction goes to the lending institution. And it is from this fraction that lending institutions are able to offer cash back or travel rewards to those cardmembers most able to repay.
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But obviously they'd prefer that if a card holder borrows $20,000 over the year and struggles to pay off the debt so they can charge them ursurious rates of interest and other fees.
That said, I'm sure it's a fine line and credit card companies have some kind of bl
Re:I have no debt and a hefty savings account (Score:5, Interesting)
A point of clarification: the credit card *never* loses money on a cardholder. Merchants have to pay the issuer for every transaction. This more than covers the issuers fixed costs.
However, consider two customers who buy exactly the same amount each month. Customer A earns the card issuer $5 in merchant processing fees, but because he pays off the amount at the end of the month there is no interest. Over the course of a year the issuer will only make $60.
Customer B also earns the issuer $5 in merchant processing fees, but only makes the minimum payment of $300 so there is an interest gain of $45. With the same credit limit and both maxing it out, customer B only manages an additional $1/month in merchant processing fees for the rest of the year, but the total take is over $556.
If customer A only earns you $60 and customer B earns you $556 -- which customer do you prefer?
Now comes the fun part. If you raise customer A's limit you will get only a marginal profit increase if they fully utilize it. If you double it from a $3000 limit to $6000 you have increased volume you only get another $60. But if you double customer B's limit then you get another $556.
And the funny thing is, people who max their card will max it out again soon after a limit increase. *And* they will usually keep making the (new, higher) monthly payments. Of course, there *is* a limit. Which is why an issuer won't double the limit, they use smaller increases instead. But getting near that limit is really good for the issuer. Not just from maximizing the minimum payment, but from fees.
Eventually, customer B will have a bad month and not make the minimum payment. Maybe they'll forget the payment, maybe a medical expense, maybe their car broke down. Whatever it was, it will be an unavoidable expense. So instead of only making $45 from accrued interest, they get another $50 from a late payment. Oh, but that bumped the card over the limit, which is another $50 fee.
For the issuer, this is a wonderful situation because they get all of the benefits of a higher monthly payment without any of the risk associated with a higher balance. If customer B gets caught up at some point then its time to increase their limit (if you haven't already speculatively done so) in order to make it easier for them to miss a payment.
Yes, numbers provided are not exact. But they are in the ball park. I used 18% APR, but I've seen cards with over 24%. I've seen low interest cards though I've never had one myself: I pay the balance off each month so I'm "high risk" for them ever seeing a profit and consequently only get offers for high interest/annual fee cards. But things will change if ever have trouble making payments....
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I'm pretty sure that what they actually mean is that someone who doesn't roll over debt won't "pay back" the debt in the form of interest without actually getting rid of the debt. If as a bank you've made back the principal and more, then you can easily extend the limit a little further. You can literally not fail to collect what has already been paid back. In that position you want to give them the option to go into more debt instead of reducing their debt to be able to use the card again. On the other hand, why would you increase the credit limit of someone who never gives you more than you gave them in the first place?
I have heard of people having some luck saying "yea I pay it all off, but I want to, and can't make, big purchases with your card. I am going somewhere else if you don't raise the limit."
That seems to work.
Though, if someone can and does pay the card off, why do they need a bigger limit in the first place?
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There is no reason to wait till your statement. You can go an pay money in during the middle of the month if you want. It will be credited to your account immediately. Also if you want to but a bicycle for $1100 and your credit limit is $1000 then just go an pay $200 into the account *BEFORE* you buy the bike, that way your account won't exceed the credit limit. I have used that method in the past to buy items beyond my credit limit when I was a student, specifically a PC.
My experience is that your credit l
Terms may not allow overpayment (Score:2)
Also if you want to but a bicycle for $1100 and your credit limit is $1000 then just go an pay $200 into the account *BEFORE* you buy the bike, that way your account won't exceed the credit limit.
That depends on whether the terms of use of your credit card account allow payments in excess of the current balance. I've read mine, and they happen not to.
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There is nothing wrong with the system. You're assuming the point of the bank (or credit card) is to offer you a service. It's not. The bank/credit card is lending money for the
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He uses credit cards to pay for things, because it's convenient and safer than carrying lots of cash. But by the nature of the credit card, this can only be done up to the credit limit. Even if he has the money to buy all he wants, the credit card limits the amount he can conveniently spend until he repays the balance the next month.
Even though your statement is true, it is still doubtful. The reason is that a person with good credit rating normally has $10k or $15k credit limit on a credit card (2 of mine are at $15k). Increasing credit limit in a credit card is usually a long term. Isn't it suspicious when someone needs to have a limit to spend over $10k or even $15k a month if the one is not a known millionaire or billionaire? And if the person is a known millionaire/billionaire, the person would have an unlimited credit limit alre
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There is no 'market failure', there are just a bunch of idiots who take the high rate cards that get sent to them. Shop around. Both credit unions I belong to offer no-fee Visa cards (with rewards) with under 10% interest rates.
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You're not looking hard enough for a new credit card company. My credit union offers a doubling of my max limit every 6 months, if I want it, and I've taken advantage of it until I'm at a max that I feel is more than enough. (it's a ridiculous number now) I too pay off every month, and my score is just barely over 700.
The system is fine. If your bank isn't offering you the service you want, go to one that does. Credit unions are a good place to start.
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"Is there something wrong with this whole system?"
Considering the laws are bought and paid for by the same people who are raping Americans with this stuff, yes, there is something SEVERELY wrong with the system. Corporations are NOT people, that SC decision was a HUGE mistake
Car & House (Score:2)
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You are buying the wrong kind of car.
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Much as I hate nanny-state type stuff, I feel like this is one area we may need the government to come in and save people from themselves
So you want people to share their income and net worth with either the banks or the federal government (since how else would "they" determine whether or not they can offer you credit).
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If the mortgage decision was just between you and your bank and your bank actually took a financial risk, like it used to be, they'd mostly be relying on their own information.
But mortgages aren't really made by banks anymore, they are simply highly paid data collectors; those mortgages will eventually be held by the federal government. For your bank to certify to the federal government how much you pay in rent or what your income is is just an additional and unnecessary legal risk. It is simpler and safer
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Yup, and having just gotten a mortgage this year, my bank required:
- a list of my current expenses / bills
- my income for the last 2 years
- proof and history going back 6 months of the money I was using for a down payment
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The IRS doesn't share it with anyone else, though. And the IRS doesn't know your net worth.
Remembering the OPM hacking debacle, do you really want bureaucrats and the Dept. Of Commerce to have all the gory details on everyone's net worth and income?
(How outraged were you by the Manning and Snowden revelations of internal spying? This would be worse.)
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T
I'm kinda on the fence with regards to how I feel about this. One one hand, the banks are doing some shady stuff and directly trying to set people up for financial disaster for their own benefit. On the other hand, they arn't forcing people to use their credit cards beyond their means. Personally I've managed to never pay interest on any of mine. I guess it's gotta be a middle ground. Much as I hate nanny-state type stuff, I feel like this is one area we may need the government to come in and save people from themselves by restricting how much credit a person can hold based on income or something.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Shady indeed. Missing a single payment (due to a bank clerk error, not mine) and Chase upped my interest rate from almost nothing to 30%...which is evidently illegal in NY, if this site is accurate http://www.lectlaw.com/files/b... [lectlaw.com] and yet they do it anyway.
I paid the fee for missing a payment and closed the account so for me impact was limited but for people caught in the trap 30% is, to say the least, abusive.
Although my understanding is imperfect as I'm a transplant to
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I'm kinda on the fence with regards to how I feel about this. One one hand, the banks are doing some shady stuff and directly trying to set people up for financial disaster for their own benefit. On the other hand, they arn't forcing people to use their credit cards beyond their means. Personally I've managed to never pay interest on any of mine. I guess it's gotta be a middle ground. Much as I hate nanny-state type stuff, I feel like this is one area we may need the government to come in and save people from themselves by restricting how much credit a person can hold based on income or something.
Well, personal responsibility is very important. But the human nature has its limits. For example while you are personally responsible what you read and what not, spam mails are still not acceptable. And while everyone is personally responsible for not giving away personal information, fishing is beyond these limits.
In my opinion it's similar with credits: Advertising is OK up to a certain limit. And everyone is personally responsible for fact checking. But there is a certain border, and the banks are at le
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I feel like this is one area we may need the government to come in and save people from themselves by restricting how much credit a person can hold based on income or something.
Whenever you say "There ought to be a law to stop that", if it's not for the purpose of preventing imminent harm, you're probably wrong. In this case, there's one simple trick which would solve this problem for everyone, for ever. Make debt the responsibility of the lender. That is the only way to stop lenders from preying on people who can't really afford debt, and to get them to only extend credit to people who can afford to pay them back. School ought to be free; if you took out the worthless executives,
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They _want_ people who arn't completely broke but can't afford the credit so they'll keep making minimum payments forever.
Of course. It comes down to affordability, and they want people to max out their credit to the point where they can barely make the minimum payments. I bet they call this a "sweet spot of consumer debt".
For example, once you have a bunch of credit card debt, you will realise at some point that the minimum payments are weighing you down, and you will consider maybe getting a long-term loan to consolidate the debt to make things more affordable. E.g., 30K of credit card debt might have a minimum repayment of
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Re:I have no debt and a hefty savings account (Score:5, Informative)
According to lenders this makes me a credit risk.
Because you are. People with no debt are less likely to pay off debt once credit is extended, than someone with a track record of making regular payments on an existing debt. Credit score criteria are not just randomly pulled out of a hat. They are based on hard data.
Re:I have no debt and a hefty savings account (Score:5, Informative)
For all that people rail on about how stupid and illogical the credit score system is, it does generally seem to work in most cases. People who are financially responsible do tend to end up with good credit scores, and those who arn't tend to have bad ones.
The only area it's weak in is people who manage to get into their adult life without needing credit, but then if you've never had a car loan, a credit card, or any kind of debt, even if it's because you're financially well off, it's still probably a bad idea to hand you a 300k mortgage.
And building credit isn't hard. You don't have to pay interest, just get a no fee credit card, use it for some of your purchases and pay it off every month. Most banks will give you a credit card if you leave a deposit covering the limit with them for a certain amount of time, or you can get someone to co-sign (usually a parent).
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and pay it off every month
They ding you (not much) for that.
Every so often, even when I have the money, I take the bank up on a balance transfer offer. The trick is to pay it off just when the 0% incentive expires. (A web bill pay service makes it easy.)
That way, you remind them that you can pay your CC bills, while simultaneously not having to pay the 12+% APR.
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You don't have to pay interest, just get a no fee credit card, use it for some of your purchases and pay it off every month
People who don't do this and are proud of not using credit seem to be indicating that they're pretty poor at financial planning to me. I got a credit card as soon as I was legally able to (which had a very low credit limit, as I was a student with no real income). By the time I was earning, it had a big enough limit to cover all of my monthly expenses (though, unfortunately, I couldn't pay rent with it) and 1% cash back. By using the credit card, I get to have one more month's worth of salary in my savin
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but then if you've never had a car loan, a credit card, or any kind of debt, even if it's because you're financially well off, it's still probably a bad idea to hand you a 300k mortgage.
I still don't quite see the connection. How is the situation above any different from a person who kept paying off 2 digit monthly ballances off of a credit card for the last two years? Why should you trust that one with 300k? look at it the other way around - what are the most common traits for people who declared bankrupcy? Large outstanding debts, little savings, no safety nets (i.e. disability insurance or other applicable insurances), unstable income etc.
These are BTW things that European banks look in
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Exactly. Credit scores are based on your track record of managing your credit. If you've never had credit (a credit card, a loan, etc.) then you have no credit score.
Lenders treat someone with no credit history the same way an employer treats an employee that has no job experience. You're not going to get an 800+ credit score just because you have and job and pay for everything up front, just like you're not going to start out as VP of operations fresh out of school.
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Yup. In Canada (at least with the bank I dealt with) it was 2 sources for 3 years. In my case I had a 3 year car loan (paid off) plus my credit card so I was good. No idea if having 2 credit cards would do it or not.
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They are based on hard aggregate data, not individual patterns of behaviour.
People with no history of debt are less likely to pay it off because on average people with no history of debt have been refused credit because they have no money.
Now, you may ask why someone with a healthy savings account might need credit. In theory, they probably don't, but the whole payments system now revolves around credit. Cash is a either a financial disadvantage if you're trying to book
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Actually this makes sense if you think it through.
One of the key indicators lenders are looking for is a change in your financial situation, which they use your behavior as a proxy.
If you are routinely paying off all your cards, and suddenly you want to spend $100k, it's fishy because it hints at something going on.
Maybe a sudden medical diagnosis will push you into bankruptcy.
Maybe a lay off will mean you'll borrow as much as possible before missing payments and going into bankruptcy
Maybe you just want to
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Canada too!
Made it out of school with no debt, had to get parents to co-sign for my car loan despite having a decent full time job for at that point 2 years because I had no established credit.
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Because saving money and paying off credit is basically the same thing: making sure you have left over money at the end of the month to achieve what you want/need to achieve
I'm from europe, and i can't even imagine what i hear about the american system. I got a very good deal on my mortgage even without having ever had any line of credit. Here they want to know you've got a steady job.
Why would making debt give you a good credit rating? Not needing it and having saved up money, isn't that like the best fina
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Because saving money and paying off credit is basically the same thing: making sure you have left over money at the end of the month to achieve what you want/need to achieve
Nope, regular savings and paying off credit are the same things. This is why having a savings account that has a regular fixed payment increases your credit score, but one that you just dump money into periodically does not.
I think the truth is more likely closer to what others mention here: why would banks give credit to people who hardly need it, and will never ever be late in paying or transfer balances to the next month? that's where all their money comes from, sounds like a terrible customer to do business with!
It depends a lot on the kind of credit. For personal loans, the interest rates are so high that you want people who can pay it back, because you're making 10-20% in a year on the total loan. For mortgages, the cost of repossessing a house and then selling it can be very high, so you r
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Re:I have no debt and a hefty savings account (Score:5, Interesting)
What happens is you get your new card, you go to the ATM, get declined, phone in then CS tells you it's for 'security reasons' to 'protect you from fraud' then asked you to fax in 3 or 4 pieces of ID to 'verify yourself'. After that, they tell you the information was illegible and that they can't reinstate your card.
I can understand them declining people who are a likely risk but literally telling them a bold faced lie is what kind of surprised me. They used to refer to Capital One as "Cap One" for short, I'm not sure if they caught how appropriate "Capone" was to describe the way they do business.
Re:I have no debt and a hefty savings account (Score:4, Insightful)
It's not necessarily that you're a bad risk, it could be that you have low profit potential because you'll probably pay it off in time, not roll it over, etc.
Somebody's bonus depends on you getting stung for fees & extra interest, you heartless bastard!
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low profit potential because you'll probably pay it off in time
They also make money in transaction fees from vendors.
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It's not necessarily that you're a bad risk, it could be that you have low profit potential because you'll probably pay it off in time, not roll it over, etc.
I had both a debit card (for ATM and POS) and a Visa that was a charge card only, ie. I had to repay in full every month, and if no money was present on the associated then the card debt was repayed going overdraft.
I have also a securities account with the bank, so they know i have some of their and other corportation bonds, so I suppose they know I could stay easily out of debt.
A day I lost the old credit card, so I asked for a new one. The old credit card was of course disabled so a new card was given
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Lenders are the clients of the credit reporting system, you are merely the product. Lenders make more money if they can charge you a higher interest rate.
Therefore, credit reporting agencies have a vested interest in biasing everyone's credit risk upwards because it makes *their* scoring system more profitable.
I have no doubt that banks internally rank the loan profitability of all the credit reporting agencies. If banks analyze their loan data by credit reporting agency used and agency A and B both have
It does (Score:2)
Now, you might still be low risk. You might live next
Words with multiple meanings (Score:4, Funny)
I just wasted some n00bs in that FPS match, y0!!!
OH SHIT, THERE WENT MY CREDIT SCORE.... but at least I scored in the game!!! (but yet to score in real life...)
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When your means of assessing risk (housing bubble anyone?) is more or less reading tea leaves and cat entrails, looking for word associations on social media is hardly surprising.
That most financial institutions would have crashed and burned with the last recession isn't surprising either.
Look at this as proof that another round of bailouts are coming, with bankers stating with a straight face "never saw wasted on his facebook page, so I thought he was a good risk" when student debit becomes the next reamin
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"never saw wasted on his facebook page, so I thought he was a good risk" when student debit becomes the next reaming of the taxpayer.
Nah, how much extra taxes did you pay because of TARP? If government spending goes up 20%, or down 20%, it won't affect your taxes. It will affect how much the government borrows, and maybe someday that will blow up, but right now expenses are dissociated from income....it just changes the number in the debt column.
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Then logically, no one paying taxes would only mean the government borrows more, and since expenses are dissociated from income; no problems, right?
It will affect how much the government borrows...
Which has no effect on the interest rates that anyone else pays.
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I just wasted some n00bs in that FPS match, y0!!!
OH SHIT, THERE WENT MY CREDIT SCORE.... but at least I scored in the game!!! (but yet to score in real life...)
Yep the system works.
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I just lost to some douchbag on Counterstrike, so I created a fake Facebook profile for him and filled his timeline with posts about getting wasted, and then joined the KKK Facebook group and made friends with some neo nazis.
Attention all wasters (Score:4, Funny)
Please revert to the terminology of trashed. This is in relation to bug that was found in the social media freedom index. Testing so far reports it temporarily fixes the problem. Stay tuned for further updates.
The Internet is turning into War Games (Score:5, Insightful)
The only winning move is not to play.
Re:The Internet is turning into War Games (Score:4, Insightful)
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Every public face, name, tag, link, connection, comment can be found for a price from the private sector. Great for the private investigators, gov and journalists. Now all that is been shared to create a credit score. As for "don't have a traditional credit profile" was that not the origins of the "no income, no job and no assets" loans that worked out so well?
The loan itself is
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The only winning move is not to play.
Which makes it difficult to buy your own home if you're not independently wealthy.
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Well... Usually when you will be forced to pay three houses to have one as goes on here (ludicrous interest rates, "taxes", even plain fraud), it is best not to take the trouble of trying to buy a house.
Have to disagree, sorry. Better to pay X (including interest) to buy a home and have something at the end of the term vs. pay X in rent and have nothing at the end of the same term.
Whoever came up with this... (Score:3)
has wasted their time.
Problem with Artifical Stupidity: discrimination (Score:4, Interesting)
Its possible to come up with algorithms that are statistically valid, but discriminatory. For example, in the US African Americans are on average lower income than whites,so it it is likely that average they are less able to repay debts. Anything that correlates with race might statistically be valid, but is racist and if done explicitly would violate all sorts of laws. How do you prove that you are not using proxies for race, or other protected classes in an analysis like this.
Systems that analyze the behavior of friends have a similar problem: people from disadvantaged cultures will have a more difficult time receiving loans, getting jobs etc, not because of what they personally did, but because of what people of their culture did. This is the basis of racism.
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For example, in the US African Americans are on average lower income than whites,so it it is likely that average they are less able to repay debts.
Why is that? If the loan amount was the same that may be true, but there's no reason why a less wealthy person can't repay a similarly small loan, any more or less than a wealthy person with a huge loan.
Rich people go broke too.
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Agreed. Income is probably a factor, but net debt, and leverage are probably better indicators.
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How do you prove that you are not using proxies for race, or other protected classes in an analysis like this.
Simple: demonstrate that you also red-line certain white neighborhoods, or show how many white people you decline.
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Let use some l33t speak (Score:3)
I was Wa$t3d last night.
What does it do to your credit score (Score:5, Interesting)
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It shows you can see that costs of using Facebook are far greater than the benefits it offers.
Really? Tell me the cost and tell me the benefit. The way I see it is exactly the opposite.
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The article says that it's used to judge people that have never had credit ever. If you already have a credit card, it doesn't really apply to you. I'd say it doesn't apply, but I'm sure there's a variable in an equation somewhere that has an effect but is so minor that it's almost 0 on an account that already has credit.
If you've never had credit ever, then you're subject to the same terms that creditors have always had with new applicants. Get a cosigner, get student account, get a secured CC, get a check
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Basically the creditors are wondering if you're going to be a responsible person. If you already have a credit history - a credit card with a history of on time payments, that's generally a
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So people not using privacy settings... (Score:2)
Re: So people not using privacy settings... (Score:3)
Privacy settings control whether the general public sees information. It does prevent Facebook from selling the information for profit (which it does).
So nobody read the article, or even the summary (Score:4, Interesting)
"Lansing said FICO is working with credit card companies to use several different methods for deciding what size loans people can handle, and using non-traditional sources like social media allows them to collect information on people who don't have an in-depth credit history. According to the FT, both FICO and TransUnion have had to find alternative ways to assess people who don't have a traditional credit profile -- including people who haven't borrowed enough to give creditors an idea of what kind of risk they pose."
So this has a nonzero effect on your credit score, but for anyone with a legitimate history (aka any credit card or loan ever) the effect will be so small that it would be considered negligible. What the hell do you people want? If I was an employer looking up peoples names on Facebook, like is common these days, and found out that the person was posting pictures of getting high/drunk on a regular basis or posting really horrible comments, I'd refuse to hire them too. The same applies to credit cards. Some random person with no references walks into my bank and says, "Hey give me $1000, I'm good for it". What should my response be, seriously?
"Can you prove in any way that I can depend on you to pay me back?"
If you don't want to be judged by your social profile, make it private or don't fucking post it in the first place.
Context... (Score:2)
obviously this is flawed for so many reasons.
"I just wasted xxx hours at the DMV waiting in line"
probably counts too, I imagine
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insurance soon, if not already (Score:2)
Obviously, if you "wasted" an afternoon, then you are a greater insurance (auto, life, health, ...) risk.
Maybe all top universities should study (Score:2)
Facebook privacy (Score:5, Insightful)
But if you lock-down your Facebook account properly, how can they have any idea if you're using the word 'wasted'? Do they pay Facebook for unlimited access or something?
The article doesn't even think to mention this, and I'm surprised no-one here seems to have mentioned it either.
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If you use the word "wasted" AND you are incapable of locking down your FB account, you probably ARE likely to default on your debt.
Re:Facebook privacy (Score:5, Informative)
THIS IS A REALLY IMPORTANT QUESTION! How can the article not address this?
Do they pay Facebook for unlimited access or something?
I can think of a few ways:
First, if you install any Facebook games/apps, they mine your data. I believe that is the entire purpose of them. You would have to read the individual EULAs to see what they gather. This seems like the easiest way because they can get everything.
According to this article from 2012 "Facebook is Using You" [nytimes.com] they do give out aggregate data, which can affect your credit score.
Your application for credit could be declined not on the basis of your own finances or credit history, but on the basis of aggregate data — what other people whose likes and dislikes are similar to yours have done. If guitar players or divorcing couples are more likely to renege on their credit-card bills, then the fact that you’ve looked at guitar ads or sent an e-mail to a divorce lawyer might cause a data aggregator to classify you as less credit-worthy. When an Atlanta man returned from his honeymoon, he found that his credit limit had been lowered to $3,800 from $10,800. The switch was not based on anything he had done but on aggregate data. A letter from the company told him, “Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.”
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It's more of a two step process. First you have to be insane enough to have effectively a public facebook profile, open to credit rating companies to browse, and secondly say "wasted" in your updates.
It's a close run thing, but I'd say the first step is more an indication of a bad risk.
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I thought of that two, but I don't know what is in those Facebook APIs. Can you actually do this? Who do they give access to it? How would they tie that to a social security number?
Division of Responsibilities (Score:2)
There's this plausible view of the future where everything you say and write will be monitored and processed, and will be followed up with actions. Those who perform the actions will have no responsibility for it. If their actions are unsuitable it's not their problem. You should have controlled your words better to avoid triggering action. It doesn't matter how good or bad their filters are, you just have to adapt.
It could be different. Imagine a future terrorism watchlist where you're able to sue for dama
This just.. (Score:2)
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It's not clear whether or not this is a troll but, being able to get a mortgage (and the interest rate of the mortgage) depends on your credit score. So, sure, once you have a mortgage, set a cron job to post "wasted" on your facebook account 3 times a day. Until then you have to do the bizarre credit dance and wonder if maybe one day the credit agency is going to datamine satellite imagery to see if you ever park within 10m of a pawn shop.
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It was because he didn't have a proven track record of paying anything off. It makes plenty of sense when you think about it -- they don't know where the hell he got his house or cattle from, but if they see that he's paid a bunch of lenders back for various loans over his lifetime, they can surmise that he will probably pay back theirs, too.
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