Credit scores measure behavior, not your attributes.
The issue here was fraud. My credit score doesn’t help you assess risk if someone else is impersonating me.
The issue here was fraud. My credit score doesn’t help you assess risk if someone else is impersonating me.
Credit score likewise plays a role.
There are many many attributes taken into account when discussing fraud. Some models use methods which take in all attributes. There’s many kinds of fraud as well, some of which will be impacted by credit score (for instance if you have more credit, and use your credit card more often, you’re more likely to be a target for a “hacker”. This means fraud will be more likely to occur on your account).
For reference: I’ve built fraud detection models being used at banks.
As but one component to this a person who never takes on debt has, tautologically, managed to live a life without any need of debt. That implies he would have little difficulty continuing to live a life without access to credit. Because of this, he will generally have substantially less concern about his credit rating than a person who depends on credit for their basic livelihood.
If I avoid debt for a decade, suddenly seeking debt should be a bit of a red flag, and I should have a correspondingly low credit score.
The use of data from credit reporting agencies is not to predict the outcome of lending to a specific person, but to predict the outcome of many, many loans to many, many people. For which I would say it succeeds, as the entities utilizing it seem to be economically successful due to making a smaller proportion of bad bets than entities who would not, for example in the linked article.
Yeah no.
Credit scores, being a composite set of observations of recent financial behavior, are literally the opposite of an immutable genetic characteristic fixed from birth.
Credit scores are far, far, from perfect, but if you have a better way of judging the future actions of a human than compiling a list of their recent actions do speak up.