[Noisebridge-discuss] Bringing Down the Credit Bureaus

[Brian Molnar]

Here are some incentives for lender participation:

* This service is free, the others are not.

* The service is highly accessible. Anyone can use the service. This would
be particularly attractive for small companies and individuals that don't
want to go through the hassle of setting up an account with the credit
bureaus.

* This service could potentially hold data that the other credit bureaus
don't have. For instance, landlords could use this to keep track of
late/on-time payments for tenants. They probably don't have the ability to
report this information to the big three credit bureaus. Additionally any
information that we have that the credit bureaus don't have only increases
the value, since lending institutions would now have to use this service as
well in order to get the most complete picture.

* We could offer additional features that make the service more desirable,
e.g. allowing the claim reporting system to be integrated into existing
billing/payment application suites so that late/non-payments are
automatically reported.

* As was mentioned earlier in this thread, there is also value in providing
a good/better model for creditworthiness. Given how dynamic this system
would be and how much fine grained information we could collect, it's not
unconceivable that we could improve on the existing models greatly.

To me it seems the best way to go about gaining adoption would be to start
out by targetting a particular niche and building up from there. A good
example of this would be landlords. It's probably not economical for
landlords to deal with the large credit agencies, so a free and accessible
solution may be very popular. If you can hit a critical mass within that
niche, then pretty soon you become the centralized credit agency for
renters.

This data may then be useful for potential creditors in other areas, like
credit card companies or utility services. If you get them using the system
and contributing data then more value is added, and creditors from even
other areas may find this information useful. The process repeats until you
have more of the big lending institutions using the service.

- Brian



On Thu, Jan 7, 2010 at 8:05 PM, Sai Emrys <saizai at gmail.com> wrote:

> Pardon the pragmatism, but I've only one question:
>
> Putting aside the possible pros this would have as a system, what
> incentive would lenders have to adopt this, given that the three
> majors have vastly more data, are more familiar, etc?
>
> It's nice that you want to improve the system and all, but for this
> system, it seems to me that the active participation of the lenders is
> mandatory for success. And I don't see what would get them to take the
> significant utility loss of converting.
>
> - Sai
>
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