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praxisizer

Fonz wrote: »

I certainly hope they won't remove this default.

It would be extremely unfair if those who cannot manage their finances were enabled to get the same deals as those who have taken the trouble to manage things well.

It seems to me that in an efficient market, this kind of risk decision would be based on the evidence that the customer is willing to provide, rather than relying on a rough-and-ready back-of-the-envelope calculation based on the evidence that is collected automatically. In what way do you think that would be unfair?

To be clear: I think such a system would be unfair, but less unfair than what seems to be common practice, since it would be less random. A still fairer system might reduce the importance of evidence of creditworthiness, since life deals some people a bad hand even when they behave well.

You seem to have some moral principle in mind, but it's not clear what it is.

Alex_LS

GMAD wrote: »

I've already added a NOC but am unsure if I have much faith in this. I don't know how true this is, but I've heard that many credit checks are run by computers, and as such, real people who could otherwise overturn a decision won't get to see the NOC because the computer simply works out the points for and against, etc.

As I said, if there's a NOC then they are obliged to look at it; i.e. the computer will flag up that there is a NOC and refer it for review by a human. The human can, however, completely ignore the NOC.

CannyJock

praxisizer wrote: »

It seems to me that in an efficient market, this kind of risk decision would be based on the evidence that the customer is willing to provide, rather than relying on a rough-and-ready back-of-the-envelope calculation based on the evidence that is collected automatically. In what way do you think that would be unfair?

To be clear: I think such a system would be unfair, but less unfair than what seems to be common practice, since it would be less random. A still fairer system might reduce the importance of evidence of creditworthiness, since life deals some people a bad hand even when they behave well.

You seem to have some moral principle in mind, but it's not clear what it is.

I think you're dreaming about an efficient market where financial institutions were born yesterday?

Be serious. People are assessed on risk and profitability. Lending institutions exist to make a profit while doing their best to minimise their risk.

Degenerate

CannyJock wrote: »

I think you're dreaming about an efficient market where financial institutions were born yesterday?

Be serious. People are assessed on risk and profitability. Lending institutions exist to make a profit while doing their best to minimise their risk.

This is true, however I would add that computerized assessment of people's credit histories is rather crude, and can lead to rejections that a common-sense human approach would recognize as unwarranted.

Such was the case with me, the one blemish on my file did not make me a bad risk when the rest of my circumstances were taken into account. Thankfully, the A&L folks could see this and were willing to give me a shot. Eleven years of faultless payments have subsequently vindicated their decision. Sadly, I fear that "computer says no" may be the be all and end all for a lot of institutions these days.