At 09:06 AM 4/16/01 -0700, Greg Broiles wrote:
On one hand, this makes privacy "violations" (judged against current ideals) more widespread - on the other hand, it's likely to make identity theft less likely, as the credit guarantor has a stronger motivation to make sure that the party receiving the loan really does match the dossier supplied to rate the risk involved in making the loan.
Getting the credit agencies involved as lenders or guarantors means it's actually good if different agencies rate risk differently - because it means that the transaction can be financed at the lowest available rate, where that rate reflects either especially good or especially poor information and analysis, with the expected effects on the survival of the agency. Credit agencies which include bad (because it was never correct, or because it is obsolete) credit data will end up mispricing the risk involved, which means they'll end up with no business (because they rated risk too high, charged too much interest, and made few/no loans) or too much business.
Currently, the State prohibits the collection of arbitrary data about loan applicants. Only State-blessed information may be collected and analyzed. So a private evaluation system, free of the artificial constraints imposed by the State, already has an advantage.