Congress considers credit-reporting overhaul, including putting government in charge of scores

[Anonymous]

https://www.usatoday.com/story/money/personalfinance/2021/07/02/congress-credit-score-overhaul-propo...

[KatSoDak]

Definite food for thought. It seems reasonable to me that changing the time frame for penalizing late payments from 7 years to 4 years would benefit consumers. Another area the committee touched on is how the "old" fico versions used for mortgages still penalize medical debt.

Hard to comment on this article while following this forums TOS but I will try. My opinion is that private lenders will prefer data that forecasts borrowers behavior toward debt as accurately as possible and if a government agency provides that at a lower rate than a private corporation they may switch to the government agency. However government backed lenders might be "forced" to use the new credit scoring agency. 

Who knows when/if this idea will go forward. Good read regardless. Thanks OP.

[KangiCosmos]

I am still baffled at car insurance being related to your credit score. Car insurance should be related to your driving record! Makes no sense to me if you have driven 30 years, no acidents, no tickets and someone has to pay high insurence because of there credit rating. It makes no **bleep** sense to  me.

Also the ability for someone to be hired for a job. If someone has a great working history, showing reliabilty, etc, it should not matter their credit history. It's an oxymoron, Oh you have bad vredit so we are not going to give you this higher paying job that would help you improve your credit debt.

These credit reporting agencies are making money off of our personal information and we ourselves have to pay for our own information. We should demand royalities!

[simplynoir]

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@KangiCosmos wrote:

Also the ability for someone to be hired for a job. If someone has a great working history, showing reliabilty, etc, it should not matter their credit history. It's an oxymoron, Oh you have bad vredit so we are not going to give you this higher paying job that would help you improve your credit debt.

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If you have someone who appears to have their stuff together but their credit reports show someone who is continually late on payments, piling on debt with no reduction, and so on then it's in the best interest of the company hiring people to know that. While I assume they won't base their entire decision on this it at least plays a part and can be a deciding factor if candidates are all the same. This is especially true for higher position jobs with security clearances as an example. More of a risk of fraud or even blackmail if someone's financials are a mess

[Anonymous]

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@KatSoDak wrote:

Definite food for thought. It seems reasonable to me that changing the time frame for penalizing late payments from 7 years to 4 years would benefit consumers. Another area the committee touched on is how the "old" fico versions used for mortgages still penalize medical debt.

Hard to comment on this article while following this forums TOS but I will try. My opinion is that private lenders will prefer data that forecasts borrowers behavior toward debt as accurately as possible and if a government agency provides that at a lower rate than a private corporation they may switch to the government agency. However government backed lenders might be "forced" to use the new credit scoring agency. 

Who knows when/if this idea will go forward. Good read regardless. Thanks OP.

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Changing this would be detrimental to consumers, not beneficial. Lenders don't like risk. If reporting only covers 4 years instead of 7, they'll simply choose to not lend to people who don't have immaculate profiles. They can make all the changes they want to but if creditors don't like those changes, they will stop lending. Keep in mind that creditors aren't mandated to use FICO scores but choose to do so which means they agree with the way FICO has chosen to score. The government can't make banks lend and while they can make changes to credit scoring that everyone sees, it's all smoke and mirrors because they can't do anything about banks' internal scoring and lending policies. 

[SOGGIE]

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@KatSoDak wrote:

Definite food for thought. It seems reasonable to me that changing the time frame for penalizing late payments from 7 years to 4 years would benefit consumers. 

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I agree. Thanks for the good read. This makes me wonder if the SOL would be also reduced and if EE would still be available as an option to consumers. I would also think that, under this overhaul, dispute investigations would be more thorough and much more transparent. I look forward to this overhaul.

[coldfusion]

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@simplynoir wrote:

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@KangiCosmos wrote:

Also the ability for someone to be hired for a job. If someone has a great working history, showing reliabilty, etc, it should not matter their credit history. It's an oxymoron, Oh you have bad vredit so we are not going to give you this higher paying job that would help you improve your credit debt.

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If you have someone who appears to have their stuff together but their credit reports show someone who is continually late on payments, piling on debt with no reduction, and so on then it's in the best interest of the company hiring people to know that. While I assume they won't base their entire decision on this it at least plays a part and can be a deciding factor if candidates are all the same. This is especially true for higher position jobs with security clearances as an example. More of a risk of fraud or even blackmail if someone's financials are a mess

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For my employer it is in fact a condition of hire and a condition of continued employment  (soft pulls) for those exact risks,  although a clean profile is not a job requirement. 

[SOGGIE]

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@Anonymous wrote:

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Changing this would be detrimental to consumers, not beneficial. Lenders don't like risk. If reporting only covers 4 years instead of 7, they'll simply choose to not lend to people who don't have immaculate profiles. They can make all the changes they want to but if creditors don't like those changes, they will stop lending. Keep in mind that creditors aren't mandated to use FICO scores but choose to do so which means they agree with the way FICO has chosen to score. The government can't make banks lend and while they can make changes to credit scoring that everyone sees, it's all smoke and mirrors because they can't do anything about banks' internal scoring and lending policies. 

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1) Detrimental? Say what?

2) I seriously doubt such. (stop lending)

3) Lending policies and practices are guided by law, as is credit reporting.

[Remedios]

Leave anything government related out of the conversation.

Thank you. 

[blindambition]

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@simplynoir wrote:

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@KangiCosmos wrote:

Also the ability for someone to be hired for a job. If someone has a great working history, showing reliabilty, etc, it should not matter their credit history. It's an oxymoron, Oh you have bad vredit so we are not going to give you this higher paying job that would help you improve your credit debt.

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If you have someone who appears to have their stuff together but their credit reports show someone who is continually late on payments, piling on debt with no reduction, and so on then it's in the best interest of the company hiring people to know that. While I assume they won't base their entire decision on this it at least plays a part and can be a deciding factor if candidates are all the same. This is especially true for higher position jobs with security clearances as an example. More of a risk of fraud or even blackmail if someone's financials are a mess

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+1

There has been known correlation of risky credit management = risky behavior. Which is why getting a job at a place like a bank is so difficult. Personality test, background check, fingerprinting.

If an employee is burdened by debt, and that debt takes a toll on everything in their life, a desperate act may see them steal from bank.