Equifax was hacked .... 143 million records exposed

[Jeffrey]

I fully understand the need to have credit underwriting, but the dependence on the three major credit reporting agencies is absurd. The rules of the scoring are convoluted, sometimes flat out stupid, and they do make mistakes. They had four errors equalling up to 96 points worth of mistakes on my score...took me a few months to unravel it. As I'm sure everybody here knows, something close to 100 point change is huge on a credit score.

It's so hilarious that they couldn't even keep their info secure. Or our info that is. I find them incompetent, and this kind of proves it.

They're highly incompetent, but necessary. If the 5 largest US banks created an exclusive database, then all other US banks would be in serious trouble.

[Jeffrey]

Probably straying* into PPB territory, but interesting that Ying and Bonthu have been charged, Gamble, Loughran, Ploder have not been so far.

*Okay maybe leaping into it?

The man with deeper pockets is harder to convict.

IMO, Angelo Mozilo should have gone to prison for many years.

[HereBeforeCoachK]

They're highly incompetent, but necessary. If the 5 largest US banks created an exclusive database, then all other US banks would be in serious trouble.

Well I would agree something is necessary for the reasons you mentioned. That said, the rules are convoluted - for example, paying off your mortgage can HURT your score under some circumstances. What they measure is a game, a puzzle, but only has a passing relevance to actually being able to pay off a loan and credit worthiness.

the reaction time to mistakes is slow and they make too many mistakes as well.

[Indoor66]

Well I would agree something is necessary for the reasons you mentioned. That said, the rules are convoluted - for example, paying off your mortgage can HURT your score under some circumstances. What they measure is a game, a puzzle, but only has a passing relevance to actually being able to pay off a loan and credit worthiness.

the reaction time to mistakes is slow and they make too many mistakes as well.

You are penalized for NOT having a home mortgay.

[Jeffrey]

Well I would agree something is necessary for the reasons you mentioned. That said, the rules are convoluted - for example, paying off your mortgage can HURT your score under some circumstances. What they measure is a game, a puzzle, but only has a passing relevance to actually being able to pay off a loan and credit worthiness.

the reaction time to mistakes is slow and they make too many mistakes as well.

Give me accurate credit information, keep credit scoring. I only see a need for the first component.

[HereBeforeCoachK]

Give me accurate credit information, keep credit scoring. I only see a need for the first component.

This is what we used to have when banks were underwriting their own clients. Of course, that was costly an inefficient I would imagine, especially for mass loan universes like the auto loan business. So the banks like the streamlining, and they also like - at times - the excuse NOT to loan the money, and lay it on the reporting agencies.

[budwom]

You are penalized for NOT having a home mortgay.

Not true with my credit report....I get a free update every month from Transunion via my Mastercard, and their six criteria are: on time payments, oldest credit line (25+ years is tops), % of credit used, recent inquiries, new accounts, and available credit. A mortgage is one of many inputs which determine your credit history, but not having one won't hurt you, as least as far as Transunion is concerned...and I think they're all roughly the same...

[Jeffrey]

This is what we used to have when banks were underwriting their own clients. Of course, that was costly an inefficient I would imagine, especially for mass loan universes like the auto loan business. So the banks like the streamlining, and they also like - at times - the excuse NOT to loan the money, and lay it on the reporting agencies.

IMO, prudent financial institutions are still underwriting their own clients. IMO, financial institutions can create much better (and highly efficient) underwriting systems than credit bureaus.

[thedukelamere]

Not true with my credit report...I get a free update every month from Transunion via my Mastercard, and their six criteria are: on time payments, oldest credit line (25+ years is tops), % of credit used, recent inquiries, new accounts, and available credit. A mortgage is one of many inputs which determine your credit history, but not having one won't hurt you, as least as far as Transunion is concerned...and I think they're all roughly the same...

The "oldest credit line" section needs some work... It bugs me every time I check my report and see that as my only "needs improvement" section. I think 11 years of on time payments and paying off my cards each month should negate any risk factors that come with my age.

[budwom]

The "oldest credit line" section needs some work... It bugs me every time I check my report and see that as my only "needs improvement" section. I think 11 years of on time payments and paying off my cards each month should negate any risk factors that come with my age.

I absolutely agree, I had no idea that was a criterion...and in fact my oldest account is indeed older than 25 years, but I don't see the point in bothering with it, score is high enough.

[HereBeforeCoachK]

IMO, prudent financial institutions are still underwriting their own clients. IMO, financial institutions can create much better (and highly efficient) underwriting systems than credit bureaus.

Jeffrey, I wish that were widely true, and I'm sure it's somewhat true - but the most prudent conservative cautious major bank in NC still relies heavily on bureau reports.

Now, for a 10 million dollar commercial loan or something, of course that's underwritten individually - but I really do not think it's the standard. And it's never the standard for auto sales, boat sales, most mortgages...

[Jeffrey]

Jeffrey, I wish that were widely true, and I'm sure it's somewhat true - but the most prudent conservative cautious major bank in NC still relies heavily on bureau reports.

Now, for a 10 million dollar commercial loan or something, of course that's underwritten individually - but I really do not think it's the standard. And it's never the standard for auto sales, boat sales, most mortgages...

Absolutely, I'm almost always doing the exact opposite of 95%+ of my competition. I probably could have had a very successful career based almost solely upon that business practice.

For example, at current rates, why is any financial institution holding 30 year fixed rate mortgages? IMO, service and immediately sell FRMs.

[budwom]

Absolutely, I'm almost always doing the exact opposite of 95%+ of my competition. I probably could have had a very successful career based almost solely upon that business practice.

For example, at current rates, why is any financial institution holding 30 year fixed rate mortgages? IMO, service and immediately sell FRMs.

Indeed, 40 years ago I was a VP at Vermont's largest bank (not saying much), a family owned operation which kept its 30 year mortgages...then interest rates hit 16% and higher, the bank was toast. They were clueless.
Before that the small bank I worked at was among the first in New England to sell mortgages, we routinely sold them to Merrill Lynch, and serviced them which was reasonably profitable...

[Jeffrey]

Indeed, 40 years ago I was a VP at Vermont's largest bank (not saying much), a family owned operation which kept its 30 year mortgages...then interest rates hit 16% and higher, the bank was toast. They were clueless.
Before that the small bank I worked at was among the first in New England to sell mortgages, we routinely sold them to Merrill Lynch, and serviced them which was reasonably profitable...

Exactly, history repeats and fools repeat it. Amazing how much 3-4%, 30 year, FRMs some financial institutions elected to recently keep. What do these fools think is going to happen to deposit rates, over the next decade, as the Fed unwinds its $4.5 trillion portfolio? Otherwise, the logical economic scenario, over the next decade, is another recession, and then what do these same fools think will happen to FRM delinquencies and charge-offs? A 3-4% rate does not leave much charge-off margin, in addition to operating and deposit expenses.

[budwom]

Exactly, history repeats and fools repeat it. Amazing how much 3-4%, 30 year, FRMs some financial institutions elected to recently keep. What do these fools think is going to happen to deposit rates, over the next decade, as the Fed unwinds its $4.5 trillion portfolio? Otherwise, the logical economic scenario, over the next decade, is another recession, and then what do these same fools think will happen to FRM delinquencies and charge-offs? A 3-4% rate does not leave much charge-off margin, in addition to operating and deposit expenses.

The bank I worked for was then a savings bank, and by law (until the late 1970s i think) ONLY made mortgage loans. Easiest business in the world, hence the term bankers' hours for a 9-3 day. They took in savings (passbooks!) paying 2-3% interest, made home loans at 5-6%, ridiculously easy and lucrative...did not make busines loans or car loans, nothin'! What could go wrong? Nothing until the late seventies...then poof went the business. They tried to adapt when the laws changed, but it was too late.

[HereBeforeCoachK]

On this topic...sort of...I received the normal notice that I get from LifeLock about credit scores being updated. When I checked, Equifax had dropped us 22 points in a month, and was now 50-60 points below the other two major bureaus. The other scores are extremely good, so our score is still in the upper GOOD range, but man, 50 points!!!!

In the past, the LifeLock web site let me see any problems that popped up, but will not do it this time. So I called them, and they said I had to call Equifax to find out what had happened. So I did, and after the normal series of giving info and hitting numbers on the key pad for verification, and routing, the Equifax guy told me that Equifax didn't score it, that LifeLock uses Equifax info and scores their own.

WTF??? I don't think that's how it works...here I am between these two giant companies (one more giant than the other) - and can't get a straight story on how LifeLock came up with the Equifax score they reported to me. It's been escalated in LifeLock and theoretically I'll get a supervisor today to work through it.

Obviously, in the meantime, I did the old school form to get a copy mailed to me, but that's a Jurassic era 15 day process, and I"m not a patient guy. Several years ago they made a couple mistakes, and AMEX made one, and our score was 100 points lower than it should have been. I got those handled in pretty short order.

I guess to get it back on track for the thread, I think it's clear Equifax has some major administrative problems, and there are way too many mistakes made all up and down their food chain.

[budwom]

sounds like your Life Lock guy was doing his job well: throw a ton of crap and bad info your way in order to get you to go away. Horrible customer service is pervasive these days, some companies do it very well, many simply don't care.

[HereBeforeCoachK]

sounds like your Life Lock guy was doing his job well: throw a ton of crap and bad info your way in order to get you to go away. Horrible customer service is pervasive these days, some companies do it very well, many simply don't care.

I actually think the Equifax guy, from India BTW, was the problem. I think LifeLock is doing their job for the most part. I'm not sure if that's what you meant....

[Jeffrey]

I hesitate to write this on a public forum, but I'm certain the bad guys are very well aware.

IMO, this is the largest problem the USA faces. Terrorist never need to come anywhere near our borders to wreck total havoc on our financial system. Imagine getting up one morning to find there is no money in your bank account. Now, imagine over 100 million Americans simultaneously having the same experience.

I'm prepared for this possibility, but I doubt many Americans are. Maybe, you should be prepared.

As stated above, IMO, this is just the beginning....

https://www.wsj.com/articles/four-me...ch-11581346824

[HereBeforeCoachK]

As stated above, IMO, this is just the beginning...

https://www.wsj.com/articles/four-me...ch-11581346824

I was just having this discussion with my wife this morning....identity theft (and other hacking risks) have made it dadgummed (apologies to Roy) hard for honest people to do legitimate business with banks, etc.