The problem with this is the biggest, most important, and sketchiest data brokering services (credit monitoring) are all but entrenched in law at this point.
I don't really know what you expect, people are obviously going to want to know your credit history when they're lending to you. If you can't tell what loans someone has, they could have opened a hundred different accounts and used the money in the casino.
Well, there are multiple approaches, but here's one that worked well for me: when I purchased a home in the country where I now live, and the mortgage lender asked for a credit report from the (high-privacy) country where I lived the longest, what they got was a letter from that country's central bank listing the penalties for requesting that information. Up to and including jail time.
Suddenly the credit report was no longer a prerequisite to the mortgage.
It feels onerous as an idea because bank statements, monthly bills, payslips, will bequests, stock vests and trades, bank robberies*, and investment income each have different ways of being tracked. At least most of these records of individual financial activity come with a PDF these days. It wasn’t that long ago that applying for a loan meant scanning in papers for your lender to review.
Computers are smarter now. Not only can they read documents (or at least match the shapes against shapes they’ve been told are real) but they can also understand the contents too (or at least match the words against ideas they’ve been told are real.)
There may well yet be a future Data Valhalla where individuals hold their life.zip themselves, and upload whatever bits of it are needed to get that Nordstrom store card / car financing / cheeseburger loan without having an intermediate credit agency.
*I feel there’s a kernel of a joke there about a bank robber asking for a receipt with the loot in anticipation of declaring it on their tax return.
You send them digitally signed statements from other lenders (who are legally required to give them for free with accurate info) or independent rating agencies, they evaluate them and make a decision. They can have their own model or license one from FICO.
That does mean banks can't know if you lie by omission and hide some unpaid bills, but they can raise the evidence requirements to compensate and I think everyone deserves a second chance.
The problem with this is the biggest, most important, and sketchiest data brokering services (credit monitoring) are all but entrenched in law at this point.
I don't really know what you expect, people are obviously going to want to know your credit history when they're lending to you. If you can't tell what loans someone has, they could have opened a hundred different accounts and used the money in the casino.
How should credit reports work?
Well, there are multiple approaches, but here's one that worked well for me: when I purchased a home in the country where I now live, and the mortgage lender asked for a credit report from the (high-privacy) country where I lived the longest, what they got was a letter from that country's central bank listing the penalties for requesting that information. Up to and including jail time.
Suddenly the credit report was no longer a prerequisite to the mortgage.
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You bring your own data to each credit check.
It feels onerous as an idea because bank statements, monthly bills, payslips, will bequests, stock vests and trades, bank robberies*, and investment income each have different ways of being tracked. At least most of these records of individual financial activity come with a PDF these days. It wasn’t that long ago that applying for a loan meant scanning in papers for your lender to review.
Computers are smarter now. Not only can they read documents (or at least match the shapes against shapes they’ve been told are real) but they can also understand the contents too (or at least match the words against ideas they’ve been told are real.)
There may well yet be a future Data Valhalla where individuals hold their life.zip themselves, and upload whatever bits of it are needed to get that Nordstrom store card / car financing / cheeseburger loan without having an intermediate credit agency.
*I feel there’s a kernel of a joke there about a bank robber asking for a receipt with the loot in anticipation of declaring it on their tax return.
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How did lending work before nationwide mass surveillance of consumers and reporting on their activities?
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Why should they work. We used to think that money lenders were evil.
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You send them digitally signed statements from other lenders (who are legally required to give them for free with accurate info) or independent rating agencies, they evaluate them and make a decision. They can have their own model or license one from FICO.
That does mean banks can't know if you lie by omission and hide some unpaid bills, but they can raise the evidence requirements to compensate and I think everyone deserves a second chance.
Having someone vouch for you.
It is illegal, if it's PII without explicit consent.