Re:In Detroit a $6.5M loan fund threw FICO scores out, the r...
by jaclaz on Friday September 01, 2017 @09:39AM
(#15148207)
More properly, they hand picked 40 businesses that later came out as being successful/capable of repaying the loan.
We don't have data to know if 40, 400 or 4000 businesses applied and then only 40 were financed or if all the 40 that applied were successful.
In other words, one may be reliable even if he/she has a bad credit record (along the established though most probably unfair current ratings), but the fact that these ratings are flawed doesn't mean that everyone with a bad credit record is reliable.
It is likely that there is a "gray zone" of people that do not satisfy the criteria of the current system credit ratings while still being good re-payers.
All in all this seems a lot more similar to VC funding than to "traditional" credit.
We don't have data to know if 40, 400 or 4000 businesses applied and then only 40 were financed or if all the 40 that applied were successful.
In other words, one may be reliable even if he/she has a bad credit record (along the established though most probably unfair current ratings), but the fact that these ratings are flawed doesn't mean that everyone with a bad credit record is reliable.
It is likely that there is a "gray zone" of people that do not satisfy the criteria of the current system credit ratings while still being good re-payers.
All in all this seems a lot more similar to VC funding than to "traditional" credit.