Authored by Simon Black via SovereignMan.com,
Tell me this isn’t crazy...
A few days ago the creator of the most famous consumer ‘credit score’ in the United States announced a major overhaul in how it rates borrowers.
Consumers live and die by this ‘FICO score’. A high FICO score means that it’s easy to obtain loans at lower interest rates.
And a bad FICO score (in theory) means that you have a history of not paying your debts… hence making it difficult to obtain loans.
Well it turns out there are tens of millions of people in the US who either don’t have FICO scores at all (i.e. NO credit history), or they have BAD credit.
So FICO decided that they would reinvent the way they calculate the scores– giving a big boost to people with bad credit.
Virtually overnight, people who have a history of not paying their bills will immediately be deemed creditworthy.
And poof… they’ll have access to more debt than ever before.
No offense, but what a bunch of idiots.
This company is deliberately lowering its standards and pretending that people with a terrible credit history are actually top quality borrowers.
Gee where have we seen this before?
Oh that’s right… just before the massive financial crisis ten years ago! It’s genius!
It wasn’t even that long ago during the housing boom in the early 2000s that banks were doing EXACTLY the same thing– deliberately lowering their lending standards and providing loans (WITH NO MONEY DOWN) to borrowers with bad credit.
http://www.zerohedge.com/news/2018-10-25/what-bunch-idiots
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