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Established Contributor
Watchmann
Posts: 985
Registered: ‎05-14-2008
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New Bias Charges Against FICO Scores ..... unfair to minorities

[ Edited ]

Interesting article from Investor's Business Daily ..... evidently our government is going to target FICO scores as being biased against minorities.  Looks like more easy credit will be coming their way, courtesy of continued government meddling.  And I always thought a FICO was based on an analysis of how likely you were to pay your credit obligations, regardless of who you were and where you came from.:

 

http://news.investors.com/article/618147/201207131919/fair-credit-zealots-on-war-path-against-fico.h...

 

 

 

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drkaje
Posts: 3,492
Registered: ‎07-25-2008
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

This is horrifically bad news for everyone. This has nothing to do with minorities and means the economy isn't rebounding anytime ever!


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cassembler
Posts: 470
Registered: ‎02-07-2011
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

I see poor credit for a given ethnic group as a symptom of a problem, not the problem itself. The causes are complex factors like education consumption, culture, and public service quality. Didn't anyone read Freakinomics?

 

Treating symptoms (in contrast with treating root causes) is a recipe for inefficiency at best.

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
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drkaje
Posts: 3,492
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

Fairness is why a lot of people hate so much, LOL!


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greeneman21
Posts: 89
Registered: ‎06-18-2012
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

[ Edited ]
 
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marty56
Posts: 5,679
Registered: ‎10-06-2007
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

[ Edited ]

Common sense tells us this could never be true.  Even if the formula did have an input for race, where did it come from?  You CR doesn't even know your sex or religion, sexual orientation, etc.

 

Sadly many people will buy this as true, it's never their fault.

09/12/2013 FICO: EQ: 772 EX:813 TU:752
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cassembler
Posts: 470
Registered: ‎02-07-2011
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

[ Edited ]

greenman21 wrote:

I'm an African american and find that offensive. Racial my ass, get off your ass, find a job and pay your bills, its that simple. Credit Bureaus don't measure your income or race (unless there is something I don't know), but how you manage credit and debt. This sounds more like an educational subject rather than credit issue. Looking at the facts here, but to say the average African American has lower credit scores doesn't tell the whole story, we also have the highest crime rate, by far the highest % of our race in jail, highest % of single families and the list goes on.


Absolutely. Again, the correlation is just that: a correlation. Statistics tells us that correlations are not a causal relationship; the scores are just a symptom of a deeper issue.

 


marty56 wrote:

Common sense tells us this could never be true.  Even if the formula did have an input for race, where did it come from?  You CR doesn't even know your sex or religion, sexual orientation, etc.

Sadly many people will buy this as true, it's never their fault.


Can you imagine the backlash if this was the case? "You're African American. Most FICO High Achievers are Asian, on average." That would be the end of FICO, at best.

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
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drkaje
Posts: 3,492
Registered: ‎07-25-2008
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

This is a case where FICO is being scapegoated, LOL!

 

I just hope things turn around soon.


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greeneman21
Posts: 89
Registered: ‎06-18-2012
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

[ Edited ]

Great fact about Asians, having the highest credit scores, had no idea about that.

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drkaje
Posts: 3,492
Registered: ‎07-25-2008
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Re: New Bias Charges Against FICO Scores ..... unfair to minorities

@ greenman,

 

Let's not totally dismiss the idea until they say how many points I'd get, LOL!

 

I keed! I keed!! :smileyhappy:

 

This being seriously discussed means a dire economic outlook, for the majority.


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