@Remedios wrote:
@Anonymous wrote:
@Remedios wrote:
@Anonymous wrote:
@Remedios wrote:Because according to LN, you're a higher risk because if you have store cards, you're poorer, less educated and more likely to file a claim for financial gain. Also, presence of store cards indicates you're in financial distress. I wish I was joking
There are very few things in life I hate more than LN.
With that said, they award extra points (though consumer can no longer get their own score from LN) if you have aircraft or watercraft.
I wonder how they would feel about Boats'R'Us card, if there was one.
It's all meant to be somewhat data driven, like FICO. Data mining shows some correlations between various factors and outcomes, not necessarily causal but strong enough for insurance companies to be interested.
Somewhat being the key word
Data is only as good as humans who interpret it, or if the interpretation benefits those for whom it's intended.
Once cherry picking starts, data is turned into conjecture. If one wanted to, they could "establish" causality between any two events.
Well, I don't know what process LN and others use, but this certainly doesn't have to be the case. It is in their interest to be as "correct" as possible, i.e. identify those most likely to default. And they don't need to establish causality at all, just note that people with this mix of factors appear to be more likely to default, and penalize accordingly.
In the FICO world, people are happy to accept that AZEO seems to maximize score, which would imply a lower risk of default. There seems no obvious reason why someone doing that rather than having small balances on a few accounts should be lower risk. I don't know if this is also a data driven finding, but it wouldn't surprise me.
Big data and machine learning is capable of some amazing stuff. So I am more inclined to believe "this appears to work for me" from the insurance company view rather than ascribe other motives.
True, they are.
A question though, if mere presence of store cards indicates I'm about to hit ambulance (which I did a few days ago, but it wasn't my fault) and file a fraudulent claim, why those from whose data source they draw, does not treat store cards the same way?
Wouldn't logic dictate that if I'm more likely to commit one kind of fraud based on credit data, 5% cash back on t-shirt also means I'm more likely to default on my financial obligations based on that same data?
Even AZEO does not maximize all scoring models and all scoring flavors. Just some, especially older ones.
According to Fico 2, I'm about to snatch purses. Fico 8 is underwhelmed.
There is a very good reason why CBIS is not allowed in some states, and hopefully more will follow.
It's punitive at best, but that's almost political discussion because of factors involved. We don't get rewarded with good rates, we just get less of a penalty.
That to me is an important distinction. I guess that can be said for any scoring model, not just LN.
I dont have any store cards and no proverbial horse in this race. I also dont have a boat but live by the water, so I get penalized for that.
I saw it way back when you could buy your own score. Can't do that any longer.
They will gladly provide you with 500 pages of addresses you never lived at.
+1
@HeavenOhio wrote:The only way I've seen store cards have an effect on FICO is that they occasionally seem to be a less than optimal choice for one's AZEO card, i.e. the card that reports the single positive balance.
With LexisNexis, the summarized version is that as a group, people who have store cards are more likely to make insurance claims.
I am Glad I live in Kalifornia & Drive a Fire Dept. Vehicle ..CBIS Exempt!
#OhTheAcronym I CouldMakeFor"CBIS" ..TOS
@Anonymous wrote:
@Remedios wrote:Because according to LN, you're a higher risk because if you have store cards, you're poorer, less educated and more likely to file a claim for financial gain. Also, presence of store cards indicates you're in financial distress. I wish I was joking
There are very few things in life I hate more than LN.
With that said, they award extra points (though consumer can no longer get their own score from LN) if you have aircraft or watercraft.
I wonder how they would feel about Boats'R'Us card, if there was one.
LOL. Whats next... If you own a sub-compact car you are too poor to be approved for a Siggy but perfect to pay more out of pocket for higher APRs and insurance rates? No mention of the sky high repo rates for boats and airplanes.
If they see a McDonald's or Burger King charge on the card, they figure you are too lazy to cook and too poor to get steak and lobster, so they ding your score and raise insurance rates, because lazy people won't put the effort into paying attention on the road.
