@omgitsMatt wrote:
I blame the lender and how they determine risk and reward, not the borrower.
Basing an opinion on blaming low hanging fruit and the persistent myth of how millennials are to blame for everything is nothing new and just click bait anymore it seems. It’s always the younger generations fault. It’s comical even because every older generation blames the younger since cavemen have been whining about how younger cavemen ruined it for everyone with the wheel and fire. Or how sliced bread was the indicator of the end times and how evil that young man who came up with it was.
That does not make those statistics untrue, but “correlation does not imply causation”.
Is it baby boomers with 72m worldwide projected to die next year with significant amounts of debt that is the true alarm? This is why we have ageism when credit lending. Goes both ways for young and old though.
Or how about my favorite theory, Gen X between the ages of 40-54. In 2009, soon after the crash in 2008, there were a record number of Chapter 7 and Chapter 13 bankruptcies. The statistics are terrifying and dismal when reflected on. Those bankruptcies have fallen off or are recently falling off in the last few years. This is the year. In the next year or two most will have fallen off. Did that generation learn anything or do they now get to start over and repeat history? We’ll see.
I think the true cause is lenders and how they determine risk with nominal data from antiquated evaluation assessments from credit scores, no matter which scoring model we’re talking about.
It’s as simple as technology and information being accessible more than has ever been in the history of anything that is my theory (just an opinion that could easily be faulty). It’s easy to learn simple basics to improving one’s profile while hiding ones weaknesses with the education to do so readily at hand when it comes to credit profile building or repairing. It’s never been easier and believe it or not, that information is being used by the consumer too. The algorithms, other than a few minute exact details, have basically been broken because of how informed the consumer is. Just average folks who can't name all three bureueas and don't have a myFICO forum account know their data is being tracked now and knows simple basics to make it seem better than it all is.
Farming metadata to determine the risk of a consumer is the only way to truly figure out a genuinely accurate assessment on the risk/reward and don’t be surprised when that becomes popular. I abhor the thought of it, makes my stomach turn. But it's going to happen.
It’s not the Gen X generation and their bankruptcies falling off.
It’s not baby boomers dying.
It’s not millennials.
Its lenders falling behind the times. They need to catch up. What millenials have sounded the alarm on is in fact how antiquated the fico scoring model really is, they're the ones with the experience to learn the basics to the algorithms determined when scoring them via technology.
The scoring models only work if the consumer doesn’t know they’re being scored.
Lenders should stop loaning to risky people.
Actually it all about Job Security. After 2008 meltdown, there was mass layoffs/closings even federal jobs wasnt secured. Pre-2008, alot of Americans believed that their jobs was secured and the income are safe. One of the hardest lesson for all types of employment is no jobs are secured regardless what a employer tells you. Years proceeding 2009 to 2015 was the hardest hit for job search. Everybody in america going for the jobs that are very few openings. It was Employer's market. The 2008 meltdown affected every income levels, every job, all walks of life. Because of no job security/ loss of jobs which resulted mass defaults/Bankruptcies. The moral of the story is No jobs are secured and one can be easily be replaceable.
