Shadow credit score could decide whether you get an apartment

Re:Shadow credit score could decide whether you get an apart... by PeterisP on Tuesday March 29, 2022 @07:59PM (#30849904)

At my home the approach is a central registry of defaults that can be accessed with your permission (which is required by some but not all lenders to evaluate you). It's kind of an extreme version of a credit score, where everyone who has never defaulted - or where the cause of default wasn't their fault e.g. identity fraud - has a perfect "credit score".

The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.

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Re:Shadow credit score could decide whether you get an apart... by addaon on Tuesday March 29, 2022 @11:51PM (#30851325)

Doesn't this system also require a central registry of outstanding debt per individual? Otherwise if the bank ratio calculations say they're comfortable lending you $1000, what prevents you from going to 100 banks and getting 100x that amount (which, presumedly, would be beyond each individual bank's risk tolerance)?

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Re:Shadow credit score could decide whether you get an apart... by chii on Wednesday March 30, 2022 @12:21AM (#30851458)

This is exactly what happened with https://en.wikipedia.org/wiki/Archegos_Capital_Management#Ma... - they had what basically amounts to loans to several different banks (with each bank largely unaware of his other leveraged holdings at other banks).

When the stock price dropped and started to make margin calls on the loans, some of the banks had to take a loss as there wasn't enough liquidity to sell into.

banks don't like to be in this sort of situation - in this particular case, the banks just didn't do enough due diligence presumably.

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Re:Shadow credit score could decide whether you get an apart... by maxk42 on Tuesday March 29, 2022 @11:25PM (#30851224)

That's exactly what a credit score is - only the defaults disappear after a certain number of years to give people another chance.

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Re:Shadow credit score could decide whether you get an apart... by PeterisP on Wednesday March 30, 2022 @05:18PM (#30860888)

As far as I understand, people in USA with zero credit history get a poor credit score, which is a major difference from zero history being as good as it gets.

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Re:Shadow credit score could decide whether you get an apart... by astura on Friday April 01, 2022 @07:35AM (#30877144)

If you have nothing on your credit report you don't have a poor credit score, you have no credit score.

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