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A comment on The careless errors of credit reporting agencies. Parent comment

Re:The careless errors of credit reporting agencies by mikeash on Sunday September 11, 2016 @08:46PM (#12476491)
Accurately predicting your likelihood of default is worth a ton of money. If every company makes bad assumptions like you describe, then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise.

That doesn't mean that systematic failures can't happen, but they're pretty unlikely. It's much more likely that you underestimate the correlation between these disparate defaults than that the banks overestimate it.

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Re:The careless errors of credit reporting agencies by popmystack on Sunday September 11, 2016 @10:25PM (#12476820)
> then a new company could make a ton of money by correcting those bad assumptions and giving out loans to people who can't get them otherwise.

This quite literally happens already.

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Re:The careless errors of credit reporting agencies by mikeash on Monday September 12, 2016 @11:31AM (#12480561)
That's pretty much my whole point. New companies regularly step in and take advantage of competitors' biases, so anything that looks like a long-term systematic bias probably is actually a reflection of a real correlation instead, because if it was a real bias, somebody probably would have stepped in and taken advantage by now.
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