[Noisebridge-discuss] Bringing Down the Credit Bureaus

[Ryan Castellucci]

Practically speaking, you'd probably have to have the service
initially pay lenders for data.  They'd have no incentive to give it
to you for free initially.  Also, you'd have to try to market it to
getting data on some group that is undeserved by traditional credit
reporting.  Non-citizens maybe?  Pay the payday loan places to give
data on their victims^Wcustomers?

On Wed, Jan 6, 2010 at 6:25 PM, Ben Kovitz <bkovitz at indiana.edu> wrote:
> Wow, I like this idea. I think a lot of people would like this idea.
> Writing the software to do this sounds very feasible on a low budget. As you
> mentioned, the hard part will be building up a network of lenders.
> All that's needed, really, is one lender to get started. Does anyone have
> any contacts in the banking world?
> Or maybe something like Kiva?
> Sent from my iPhone
> On Jan 6, 2010, at 8:13 PM, Brian Molnar <brian.molnar at gmail.com> wrote:
>
> Problem:
> I hate the big three US credit bureaus (Experian, TransUnion and Equifax).
> While the service they offer is useful for lenders, these companies go about
> providing that service in a very unscrupulous way. They're all for-profit
> companies that try to squeeze every dime they can out of the data they
> possess. This usually means they are selling your information to potential
> creditors (without your consent) or trying to get you to sign up for premium
> "credit protection" services that automatically notify you when someone
> dings your credit. Also, they cater to the lending institutions (since
> that's their primary source of revenue), so borrowers/debtors often meet a
> lot of resistance when disputing inaccurate claims or otherwise trying to
> repair tarnished credit histories.
>
> My hatred of this system has boiled over to the point that I would like to
> try to render them obsolete.
>
> Solution:
> Create a free online community that offers the same service, but without any
> kind of preferential treatment toward lenders or borrowers. That is, a
> web-based credit-reporting solution with equal accessibility by all parties.
>
> The system I envision would act a little like Facebook, in that individuals
> and lenders would have accounts, and when a potential lender (or even an
> individual, like a potential landlord) wishes to get access to your account,
> he/she submits to you a request for approval. Once access is granted, the
> organization can view your credit history and submit additional records,
> either positive or negative, to your profile. Anytime a change is submitted,
> a notification is immediately sent to you (via email, SMS, or whatever
> contact method you set). Furthermore, changes have a mandatory grace period
> allowing you a certain amount of time (maybe 10 business days) to contact
> the creditor and settle the claim before it posts to your profile.
>
> Imagine the following scenario:
>
> You apply for a credit card, and with the information you provide in the
> application, the bank finds your online profile and sends you a request to
> view (read-only) it. You get the request, approve it, and soon the bank uses
> that information to figure out your credit limit. Once they decide to issue
> you a card, they send another request to gain access that allows them to
> make claims against your account, which is a pre-requisite for them to issue
> you a card.
>
> Then, say, after a couple months you fall behind on payments and they decide
> to try to ding your credit, then they would issue a claim ith the service
> and you'd immediately get a notification telling you that you have 10 days
> to settle the claim with the bank before it posts to your profile. You call
> them up, arrange a sufficient payment and they cancel the claim before it
> posts.
>
>
> I think the biggest hurdle to overcome with this is adoption. In order to
> take the business away from the existing credit bureaus, one would need to
> find their biggest source of revenue and find ways to convert them over. I
> don't know whether it is enough to offer this as a free service or whether
> additional incentive would be needed.
>
> Secondly, while it is conceivable that the service could use ads to pay for
> operating expenses, there is a problem that when claims are disputed, some
> mechanism is needed to arbitrate the claim and determine the outcome. This
> mechanism would likely be humans tasked to investigate the claims, which
> would cost money. I don't know whether this would be feasable with only ad
> revenue or whether you'd need to charge one or both parties for claims
> disputes. Ideally I'd like it to be as free as possible.
>
> Anyway, just a rough sketch of what I'm going for. Figured I shoot it out
> here and see if anyone felt as strongly about this as I do and get some
> opinons on how likely this thing is to happen. Also, if anyone is
> interested, please let me know. I'd love to get a lot of motivation behind
> this and create a working group out of it. As you can tell the idea is still
> a bit inchoate, so we'd all be building it from the ground-up.
>
> Cheers,
> Brian
>
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-- 
Ryan Castellucci http://ryanc.org/