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Your Credit Score Isn't a Reflection of Your Moral Character. But the Department of Homeland Security Seems To Think It Is. (slate.com) 336

What kind of person racks up debts and doesn't pay them? Your credit score is an attempt to answer this question. A report elaborates: These important three-digit numbers summarize our statistical risk for lenders. The allure of the credit score is its clarity: It cuts through appearances and converts our messy lives into an easily readable metric. The difference between a score of 750 and 600 is obvious. One is an excellent bet for a lender to make; the other is not. On balance, credit scores have made borrowing more convenient, and fairer, for consumers. But the U.S. Department of Homeland Security wants to use credit scores for an entirely different purpose, one they were never built for and are not suited for.

The agency charged with safeguarding the nation would like to make immigrants submit their credit scores when applying for legal resident status. The new rule, contained in a proposal signed by DHS Secretary Kirstjen Nielsen, is designed to help immigration officers identify applicants likely to become a "public charge" -- that is, a person primarily dependent on government assistance for food, housing, or medical care. According to the proposal, credit scores and other financial records (including credit reports, the comprehensive individual files from which credit scores are generated) would be reviewed to predict an applicant's chances of "self-sufficiency." The proposal is open for public comment until Dec. 10. Setting aside the proposal's moral abdication when it comes to the needy, we should be troubled by another injustice: its abuse of personal metrics.

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Your Credit Score Isn't a Reflection of Your Moral Character. But the Department of Homeland Security Seems To Think It Is.

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  • Assumtions galore (Score:5, Interesting)

    by magarity ( 164372 ) on Saturday November 24, 2018 @10:45AM (#57692636)

    Does this assume that the country from which the immigrant originates is sophisticated enough to have credit scores? Does it assume that an immigrant already in the US and applying for citizenship already has a work authorization and is building a US credit score?

    • by Freischutz ( 4776131 ) on Saturday November 24, 2018 @11:46AM (#57692904)

      Does this assume that the country from which the immigrant originates is sophisticated enough to have credit scores? Does it assume that an immigrant already in the US and applying for citizenship already has a work authorization and is building a US credit score?

      Look on the bright side, this only lasts until you become a citizen. Once you are a US citizen the reflection of the content of your character that is your credit history becomes so completely unimportant that even a man who has bankrupted six casinos, welshed on god knows how many loans leading to him being treated as a leper by the entire world banking system except Deutsche bank and Russian Mafia owned money laundering factories masquerading as banks, a man who has been convicted of money laundering, cheating people out of their hard earned money with a fake university and is currently being investigated over his fake charitable foundation can become president. If DJT's credit history was an accurate reflection of the content of his character he should be a cloak wearing Sith lord with, dead eyes, pale wrinkled skin like a Shar-Pei that can lift tanks whit his mind and shoot lighting from his fingertips and not the mere sleazebag hack that he is.

    • by Gavagai80 ( 1275204 ) on Saturday November 24, 2018 @12:12PM (#57693040) Homepage

      Many people have no credit scores simply because we don't borrow. I have no credit score because I've never felt like spending more than I have. But that actually does identify me as poor and as a bad consumer -- the middle class and wealthy always have debts for their houses and cars, whereas the responsible poor may never experience debt.

      • by Baloroth ( 2370816 ) on Saturday November 24, 2018 @12:43PM (#57693174)

        Never borrowing is not really a good sign of financial responsibility. Aside from the fact that using credit cards that you pay off every month actually gives you money (through rewards programs*), borrowing money for expensive purchases you could not otherwise directly afford can allow increased financial opportunities you'd not otherwise have. Taking out a mortgage to buy a house in an area where prices are rising, then selling it later. Or taking out reasonable amounts of student loan debt to get a degree that allows you to find better paying jobs. Even taking out a loan for a car allows you to take jobs you'd otherwise not be able to get to at all.

        *You could argue that if people didn't use credit cards, everything would be cheaper (since merchants wouldn't have to pay credit card fees) and so it's a net negative for consumers. While that may be true, given credit cards do exist and are widely used, not using them yourself to gain rewards is financially irresponsible, since costs are the same to you whether you pay cash or not.

        • by Jack9 ( 11421 )

          > Aside from the fact that using credit cards that you pay off every month actually gives you money (through rewards programs*),

          That's usually not true. Credit cards are not the only things that influence your credit. Car loans, private loans, etc. There are no rewards programs there either.

        • Re: (Score:3, Insightful)

          Comment removed based on user account deletion
        • by Kjella ( 173770 ) on Saturday November 24, 2018 @03:08PM (#57693688) Homepage

          Never borrowing is not really a good sign of financial responsibility.

          It depends on how and why, if you're living in a rented apartment in a big city where your daily needs are met by public transportation there's no inherent reason you should have a loan. Yes, you could try to game credit cards but it's a hassle and the time and effort it takes could probably be spent on other cost cutting measures too like taking advantage of sales, cooking your own food, better maintenance of things you own and so on. Taking out a loan to speculate in property value is certainly possible, but the only guaranteed savings is being your own landlord. Would you really sell your house, even though it fits your needs and you've spent years furnishing and customizing it simply because you think prices have peaked? I doubt that, so the vast majority sit through both the ups and downs.

          Loans that are proper investments with a ROI or long lasting items you essentially "write off" in your own bookkeeping make sense, like you're buying a car to drive for the next ten years but it has to be paid today. A mortgage in the "safe zone" of the property value (<60% around here) for a low risk customer should have a <1% post-inflation interest, that's a small price for having the money now rather than later. What I don't understand are the people who owe like 1-2 paychecks, zero safety buffer and pay >10% interest. In all but the most dire circumstances I'd cut back enough to get out of that red zone, both for my own peace of mind and the savings. But I've got a friend who's constantly living on credit and he's got this huge urgency of things he'd like to spend money on and is only waiting for the paycheck to come in. I simply think he doesn't worry, tomorrow's problems can be fixed tomorrow.

          • I simply think he doesn't worry, tomorrow's problems can be fixed tomorrow.

            Live today, because you never know what tomorrow brings

            Ummm, you realize you've got your answer in your own tagline, right?

        • Never borrowing is not really a good sign of financial responsibility. Aside from the fact that using credit cards that you pay off every month actually gives you money (through rewards programs*), borrowing money for expensive purchases you could not otherwise directly afford can allow increased financial opportunities you'd not otherwise have. Taking out a mortgage to buy a house in an area where prices are rising, then selling it later. Or taking out reasonable amounts of student loan debt to get a degre

      • Re: (Score:2, Informative)

        I have no credit score ...

        Yes you do. You may not know what it is, but if you are an adult in America, you likely have a credit rating.

        ... because I've never felt like spending more than I have.

        That is NOT the only reason to have credit. You should apply for credit and establish a track record of handing it responsibly. Otherwise, someday you are going to want to borrow to buy a house or pay for your kid's college, and the answer is going to be "no".

        Get a credit card with a $500 limit. Use it. Set auto-pay from your bank account so you never miss a payment and never pay a cent in inte

      • You are not identified as poor -- you are identified as a risky borrower because you have no history of borrowing money and paying it back. That's all your credit score means. The next time you buy something like a TV or refrigerator, try using the "12 months same as cash" / 0% financing option if it's available, pay the item off over a year (at no additional cost to yourself) and then check your credit score -- you'll be pleasantly surprised.
      • I have no credit score because I've never felt like spending more than I have.

        I have a credit score - a rather good one - but I've never spent more than I have. One does not have to carry debt to have a credit history.

        Remember that a person is also being extended short-term credit even when they are paying off their balance in full every statement period. And that's not just the case with use of credit cards (which remain the easiest - and sometimes only - way to make purchases or payments in some situations). Thing about utilities like gas, water, electricity, cable, telephone,

      • The fact you don't borrow does not mean you have no credit score. It just means you don't have a record of borrowing and repayment. Presumably other elements, like actual car/house ownership, holding a job, etc, contribute portions to the credit score.

        from here [time.com]:

        Your credit score is generated based on the information in your credit report. Fair Isaac, the makers of the FICO score, is tight-lipped about exactly how the scores are calculated. But they do give the weights of various criteria that they look at: 35% payment history, 30% amount owed, 15% length of history, 10% new credit, 10% types of credit used.

        Percentage of available credit in use is a factor, so with 100% credit available... :)

        Personally, I also avoid borrowing whenever possible. The one time I had a store credit card, I cancelled it after getting a $50 late fee on a $20 charge that wa

      • I can't speak for the US but in Germany as soon as you get a permanent address you will have a SchuFa Auskunft. It does not matter if you borrow or not.
        • Schufa is not a credit score. It is unpaid debt tracking. The difference is that having absolutely no data in Schufa is the best possible score. In a credit scoring system you first have to prove yourself an irresponsible consumer taking loans all the time to get a credit score. That is why it is so retarded. It is just measuring how good (read wasteful) a costumer your are to banks, not how responsible you are.

    • Comment removed (Score:5, Insightful)

      by account_deleted ( 4530225 ) on Saturday November 24, 2018 @02:01PM (#57693438)
      Comment removed based on user account deletion
    • by gweihir ( 88907 )

      It is probably just "we have failed spectacularly at our job and inconvenienced and assaulted (children being groped, for example) a lot of people, but we now have this one great idea, so please let us continue for a while".

    • by vlad30 ( 44644 )
      A drug dealer could have a great credit score so would a crooked business person who rips off their customers. So yes it it has little to do with morality I know a few small business people who struggled to pay off all sorts of debt but they did it despite the discomfort it brought to them financially as their morals could not let them sleep until they achieved that.
    • Sophisticated design enough? Lol, most civilizated countries in West does not have credit scores. That is entirely an American and Israeli concept (and possibly Chinese, good company)

  • by Anonymous Coward on Saturday November 24, 2018 @10:50AM (#57692648)

    TFS says nothing about "moral character".
    Furthermore, no argument is even being made here that there is no correlation between credit score and likelihood of becoming a public charge. The writer just doesn't like the proposal.

    • Yep, total flamebait (Score:5, Informative)

      by raymorris ( 2726007 ) on Saturday November 24, 2018 @11:25AM (#57692792) Journal

      Indeed, total flamebait.

      The proposal (which may be bad or good, that's for another post) is:

      Try to estimate the likelihood that the person will becime financially dependent on the taxpayers, by looking at their finances.

      It's nothing about moral character. THIS proposal is about the financial cost to tax payers. How many financially dependent people we want to bring in is a related, though different, discussion.

      Financial dependence isn't "moral character". My daughter is 100% dependent on me financially*. She has high moral character. She's four. The headline is crap.

      I suppose someone *could* make the argument that having a habit of borrowing money and not paying it back is a moral weakness, but the authors of the proposal make no such statement. They argue that people who are financially a mess are more likely to become a drain on the tax payer.

      * My four year old daughter regularly asks for jobs she can do to earn money for extra toys.

  • China vs US (Score:2, Insightful)

    by PopeRatzo ( 965947 )

    Yesterday, we saw an article about China's "social credit" policy, and there was much outrage and gnashing of teeth and moral superiority. People were all like, "why do we do business with China?" and so forth.

    Someone please tell me how this is different from China's social credit policies.

    • Re: (Score:3, Insightful)

      by drinkypoo ( 153816 )

      Someone please tell me how this is different from China's social credit policies.

      This number is generated by corporations who don't give a shit about you and would happily kill you and sell your organs instead of by a government that doesn't give a shit about you and does happily kill people and sell their organs already. Toe-MAY-toe, toe-MAH-toe.

      • Credit scores are nothing more than applied actuarial science. Like most science, it "doesn't give a shit about you." You may hate the way companies use it, but it's a number backed by real science which simply indicates the likelihood of a borrower to pay back what they borrow. That's it. Perhaps the more important question for society is why are these big corps and even parts of the gov't still allowed to trap people in debt by lending out money they know can't be paid back?
      • Drink that poo, Ratso.
    • Re:China vs US (Score:5, Informative)

      by PeeAitchPee ( 712652 ) on Saturday November 24, 2018 @11:09AM (#57692732)
      Nonsense. Credit scores are used to assign a risk to a borrower. The higher a person's credit score, the more likely it is that they will pay back what they borrow. Unlike China's "social credit," credit scoring is is rooted in real actuarial science [wikipedia.org]. We've already seen what happens when credit scores and the like are ignored and money is just lent out to anyone regardless of their ability to ever pay it back (the mid-2000s housing crisis, and today's student loan crisis) just because "it's the right thing to do." It is a bad thing financially for the country (any country, not just the US) to import a bunch of dependents who are statistically highly unlikely to be able to provide any value to society beyond "diversity." Unlike previous generations of immigrants, there are very few opportunities for unskilled laborers in the United States. If you are hellbent on bringing them here, you better have a real plan for paying for them.
      • by owlaf ( 5251737 )
        Interesting the score doesn't reflect when someone is frugal enough most of the time they don't need credit cards or loans. My dad took out a loan on a motorcycle for the reason to get his first credit card. He had borrowed so little and been a number of years, he couldn't get a card.
        • Yep, that's exactly how it works. The banks need "proof" that someone will pay back a loan, and the only real proof is a past borrowing history.
        • by MrMr ( 219533 )
          Correct, that is actually still the norm where I live. Even worse, if you pay your credit cards balance in full every month you are not even registered as 'borrowing', so you do not build up a documented credit history.
    • China's are first, and to a more populous demographic...so naturally we've got some catching up to do. #sarcasm
    • by Kenja ( 541830 )
      Let us know when the Government inserts a warning message when you try and call someone with a low credit score like China does.
    • by Kohath ( 38547 )

      China isn't giving the gift of permanent resident status in return for maintaining good social credit.

      People have a human right to live and pursue happiness in their homeland. Entry and permanent residence in someone else’s homeland is a gift, not a right.

      • People have a human right to live and pursue happiness in their homeland.

        Where is that "human right" limited to, "in their homeland"?

        • by Kohath ( 38547 )

          People have a human right to live and pursue happiness in their homeland.

          Where is that "human right" limited to, "in their homeland"?

          In reality.

    • Re:China vs US (Score:5, Interesting)

      by guruevi ( 827432 ) on Saturday November 24, 2018 @11:40AM (#57692878)

      If you were a legal migrant you would know that the DHS (INS) already looks at your self sufficiency before allowing you entrance. That is a process that can take up to a year to complete, making it easier by taking a statistical predictor of success and self-sufficiency makes the process easier.

      As a legal migrant, your life is fully vetted before entry, integration into American culture, diseases (you need to submit full birth and medical records and have an American doctor vet you personally), criminal activity predictors and self sufficiency (income, savings and a social network) predictors are some of the biggest things they look at. Hence why illegal immigration is such a big issue (feelings of unfairness) across legal migrant populations (including Hispanics).

    • by tsqr ( 808554 )

      Yesterday, we saw an article about China's "social credit" policy, and there was much outrage and gnashing of teeth and moral superiority. People were all like, "why do we do business with China?" and so forth.

      Someone please tell me how this is different from China's social credit policies.

      OK. Let''s see now...

      The US system is based upon the financial state and behavior of the individual, and is used to evaluate the likelihood that an individual will repay a debt. High debt/income ratio? Bad. Bankruptcies? Bad. Late credit card payments? Bad. Does this system discriminate against the poor, or those who have fallen on hard times through no fault of their own? You bet it does - it doesn' care why you're a poor credit risk; only that you are

      The Chinese system is more social than financial, and

      • The Chinese system is more social than financial, and is being used by the government to shape individual behavior. Smoke in public? Bad. Jaywalk? Bad. Dog bark too much? Bad.

        They are both used to shape individual behavior and they are both involuntary.

        Also, you skipped "only using cash and not using credit? Bad"

        • by tsqr ( 808554 )

          The Chinese system is more social than financial, and is being used by the government to shape individual behavior. Smoke in public? Bad. Jaywalk? Bad. Dog bark too much? Bad.

          They are both used to shape individual behavior and they are both involuntary.

          Also, you skipped "only using cash and not using credit? Bad"

        • by tsqr ( 808554 )

          The Chinese system is more social than financial, and is being used by the government to shape individual behavior. Smoke in public? Bad. Jaywalk? Bad. Dog bark too much? Bad.

          They are both used to shape individual behavior and they are both involuntary.

          Also, you skipped "only using cash and not using credit? Bad"

          Wow. Not using credit is bad for your credit score? Who could have possibly predicted that?

          • Wow. Not using credit is bad for your credit score? Who could have possibly predicted that?

            Why should not needing credit indicate a lack of credit-worthiness?

            I don't think you've thought this through.

    • by amorsen ( 7485 )

      Being punished for not paying back a loan is a lot different from being punished for writing "N" to your friend.

      THAT is why China's social credit is a lot worse than credit scores in the US.

      Another thing is that China being totally appalling leaves plenty of room for everywhere else to be bad, while still being less appalling than China.

      • Being punished for not paying back a loan is a lot different from being punished for writing "N" to your friend.

        You are also punished for not getting a loan in the first place. It's a game you must play or not be free to travel, get jobs, etc.

    • In China, if you have a low score you can't get money from anywhere, and will probably end up under a bridge or something - maybe a work camp?

      In the U.S., if you have a low credit score you can get money from any one of a thousand predatory lending outfits that exist to suck dry those on the bottom rung of the economic ladder.

      So, it is pretty different despite similar measurement, Which is better? Harder to say.

  • by Kohath ( 38547 )

    Your credit score (vaguely) indicates whether you earn a paycheck, are self sufficient and pay your bills. It answers: How likely are you to become somebody else's expensive problem?

    Homeland Security doesn't want people coming to the US to become America's expensive problem.

    • Re:No they don't (Score:5, Insightful)

      by PeeAitchPee ( 712652 ) on Saturday November 24, 2018 @11:20AM (#57692770)

      Your credit score (vaguely) indicates whether you earn a paycheck, are self sufficient and pay your bills.

      Not exactly. Your credit score indicates how likely you are to pay back what you borrow -- that's it. It's perfectly possible (and sadly common) for people that make a lot of money to be terrible borrowers and default on loans, or declare bankruptcy, etc. Conversely, it's also possible to make a rather modest paycheck but have a high credit score -- those are usually the people who never forget to pay a monthly bill, don't run a credit card balance, etc. Finally, you have to actually borrow money every once in awhile and pay it back to really build your credit score. That's how you "prove" that you'll actually pay back what you want to borrow, and why banks look very carefully at your credit card payment histories, etc. They literally have this stuff (managing financial risk) down to a science.

  • Moral character? (Score:5, Insightful)

    by Anonymous Coward on Saturday November 24, 2018 @11:03AM (#57692692)

    Is there a correlation between credit score and being dependent on welfare? Yes, there is a negative correlation. As the credit score decreases, the likelihood that the person is on welfare increases.

    So if as a matter of policy a country wants to take in fewer people who will be dependent on welfare, then credit score is a reasonable data point which could help with that.

    I could understand a country making policy that they don't care whether the people they take in are dependent on welfare, in which case credit score perhaps shouldn't factor into their equation, but that's just a matter of policy; there's nothing wrong with using credit score or any other data point to achieve whatever policy goal you want.

    In other words, argue the policy. Should we or should we not care about immigrants getting dependent on public welfare?

    There are interesting moral and financial arguments here. But zeroing in on credit score specifically is a waste of time.

    • The problem with a credit score is that it relies on a history of borrowing. When related to immigrants, many of them have lower credit scores simply because they don't have a verified history of borrowing. Many immigrants use cash and when they borrow it is with friends and family and not institutions. Using a credit score to judge whether immigrants will go on welfare is flawed in this regard.
  • I suspect the most hard-core criminals are outwardly polite.

  • ... that this new rule:

    would like to make immigrants submit their credit scores

    ... is nothing more than some procedures to comply with GDPR [wikipedia.org]. Users of personal data will have to demonstrate some sort of affirmative permission before accessing it. In the past, there was probably some language buried in immigration applications allowing such record access. But now DHS will probably need an explicit check mark from the applicant stating 'I Agree'.

    If this is the case, it's not that big a deal. DHS (and other US agencies) have been rooting through foreigners record

  • by Fringe ( 6096 ) on Saturday November 24, 2018 @12:52PM (#57693214)
    This seems out-of-place for two reasons.

    1. Slate is for open borders and pretty much every far left cause, only bested by Salon in bias of major outlets. Of course they'll object to anything designed to filter, restrict or vet immigrants. Especially on merit, despite the strict rules Canada has doing precisely that.

    Take this sentence opening: Setting aside the proposal’s moral abdication when it comes to the needy. That's not about technology or misuse; the author is advocating specifically for taking in the immigrants least likely to have decent credit scores.

    2. This seems more appropriate for reddit than Slashdot. It's not really a nerds- or a tech-focused issue. The focus of the article (other than that our obligation should be to provide unlimited access to those who may become a burden) is that any metrics are wrong because they de-humanize the situation. Which is precisely the point of the metrics, and allows us to handle larger volumes than otherwise, but Slate considers everyone a special case, so metrics are just wrong donchaknow.

    Let's not overly politicize /.

  • In the play Shylock opines that Antonio is a "good man." Bassino, who he is talking to (or maybe talking to himself in front of) bridles at this, returning: "Have you heard any imputation to the contrary?"

    The exchange reveals a fundamental difference in how the world is viewed. Those hundreds of years ago and now.

    To the Trumpers, Republicans and Shylock a "good man" is someone who has the assets to cover his debts. If he can't he is by definition "not good."

    To everyone else (as depicted by Bassino'

  • When is the Patriot Act going to die? It needs to.
  • Is exactly why one should first and foremost be a libertarian.

    if ( Big Government == Big Problems ) then
        {
        becomeALibertarian ( you );
        }
    else
        {
        beTheIdiot ( you );
        }

  • Identity theft of those with stellar credit scores are on the rise. :|

    News at eleven.

  • Does your nation have a functioning education, legal and police system? Yes.
    Can the person speak and write some English? Yes.
    Was the person wanting to move to the USA able to pass some educational exams in their own nation? Yes.
    Any police record in their own nation? Any police record in another nation?
    Did they pay tax in their own nation?
    Have they been to the USA in the past? Any problems when they stayed in the USA in the past?
    Do they have a bank account to pay their way to the USA and then h
  • This reminds me of Chris Rock, when the news about Marion Berry smoking crack came out. âoeWhat are mothers going to say, âDonâ(TM)t smoke crack, you wonâ(TM)t be anything?â(TM) The kid will be like, âI could be mayorâ(TM).â DHS is like âoeDonâ(TM)t be a deadbeat, you cannot be a trustworthy person.â The deadbeat is like âoeI could be presidentâ

Every nonzero finite dimensional inner product space has an orthonormal basis. It makes sense, when you don't think about it.

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