Wells Fargo announces that it will be closing all personal lines of credit which may negatively impact credit scores

[Commissar SFLUFAN]

Wells Fargo once again proving that it is truly the absolute worst of all the major financial institutions.

 

Needless to say Senator Warren is rather incensed by this:

 

Sen. Elizabeth Warren slams Wells Fargo for causing potential credit score hit to its customers

WWW.CNBC.COM

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Wells Fargo finds itself in the center of another self-inflicted storm, this time over potential damage to customers' credit scores.

 

[CitizenVectron]

The entire concept of central credit scores evaluated and maintained by private entities is abhorrent to existence. 

[Kal-El814]

I saw a tweet adjacent to this from Hard Money and thought it was a joke.

 

 

 

[CitizenVectron]

30 minutes ago, Kal-El814 said:

I saw a tweet adjacent to this from Hard Money and thought it was a joke.

 

 

 

 

Wait...what? So each person has 64 accounts? 

[Uaarkson]

38 minutes ago, CitizenVectron said:

The entire concept of central credit scores evaluated and maintained by private entities is abhorrent to existence. 

 

It's really insane.

[Kal-El814]

Just now, CitizenVectron said:

 

Wait...what? So each person has 64 accounts? 

 

Hard Money is an offshoot of The Hard Times, it’s a comedy account. I just didn’t know that they were referencing a real event.

[SuperSpreader]

Just now, CitizenVectron said:

 

Wait...what? So each person has 64 accounts? 

No, only 1/64 people actually opened the account, the rest were Wells Fargo'd. 

[SuperSpreader]

46 minutes ago, Commissar SFLUFAN said:

Wells Fargo once again proving that it is truly the absolute worst of all the major financial institutions.

 

What else would we expect from San Francisco

[Guest]

What could WF do to “make it right” when they don’t run the credit reporting agencies?

[Commissar SFLUFAN]

1 minute ago, sblfilms said:

What could WF do to “make it right” when they don’t run the credit reporting agencies?

 

Something along the lines of working with the credit agencies to ensure that this involuntary closure doesn't impact the credit scores.  I'm thinking having them exclude the involuntary closure from the overall credit score algorithm.

[Guest]

Just now, Commissar SFLUFAN said:

 

Something along the lines of working with the credit agencies to ensure that this involuntary closure doesn't impact the credit scores.  I'm thinking having them exclude the involuntary closure from the overall credit score algorithm.

The impact is not the closure itself, it’s the other associated effects like length of average credit, credit utilization, and potentially new credit accounts to replace the product WF is ending. 

[CayceG]

In part, this is Wells Fargo's problem. But looking at a higher level, credit scores shouldn't exist. 

[Commissar SFLUFAN]

2 minutes ago, sblfilms said:

The impact is not the closure itself, it’s the other associated effects like length of average credit, credit utilization, and potentially new credit accounts to replace the product WF is ending. 

 

That's absolutely true!

[Guest]

3 minutes ago, CayceG said:

In part, this is Wells Fargo's problem. But looking at a higher level, credit scores shouldn't exist. 

Any ideas for alternative ways to evaluate risk in financial products?

[CayceG]

3 minutes ago, sblfilms said:

Any ideas for alternative ways to evaluate risk in financial products?

 

Whatever we did before 1989 when the FICO score was introduced. It's a capitalist version of Chinese CCP 'social credit.'

[mclumber1]

33 minutes ago, CayceG said:

 

Whatever we did before 1989 when the FICO score was introduced. It's a capitalist version of Chinese CCP 'social credit.'

 

Yep.  The world still turned prior to the invention of credit scores.  

[Littleronin]

39 minutes ago, CayceG said:

 

Whatever we did before 1989 when the FICO score was introduced. It's a capitalist version of Chinese CCP 'social credit.'

Cant stress enough that when employers want to run a credit check on an potential employee and (like in my friend here in town's case where he is just establishing himself) get denied a promotion to improve his financial stability all because he admitted that he fucked up with a credit card a few years back in college there is something wrong. This is a kid that has been busting ass to fix his mistakes but some program run by a corporate office back East decided he was still too much of a risk for promotion. The real kick to the teeth is that the promotion had nothing to do with handling money but to be the lead on his team of munitions handlers. A job you don't have to have a credit check to get. 

[Ghost_MH]

7 minutes ago, Littleronin said:

Cant stress enough that when employers want to run a credit check on an potential employee and (like in my friend here in town's case where he is just establishing himself) get denied a promotion to improve his financial stability all because he admitted that he fucked up with a credit card a few years back in college there is something wrong. This is a kid that has been busting ass to fix his mistakes but some program run by a corporate office back East decided he was still too much of a risk for promotion. The real kick to the teeth is that the promotion had nothing to do with handling money but to be the lead on his team of munitions handlers. A job you don't have to have a credit check to get. 

 

Yeah, but what if that potential employee has bad credit because they almost died and medical care in this country is wildly expensive? Who would want to hire someone that almost died that one time?

[Commissar SFLUFAN]

An "unintentional" side effect of reverting to a pre-FICO situation could very well be a reduction in the availability of consumer credit which in and of itself may NOT be a bad thing at all.

[Guest]

I’m not sure most minorities want to go back to pre-FICO credit scoring where the game was even more tilted against them. We need better systems, and I would say both FICO 9 and Vantage 4 are major improvements

[b_m_b_m_b_m]

A stronger safety net and anti discrimination regulations and oversight would be better than any credit score changes

[mclumber1]

18 minutes ago, sblfilms said:

I’m not sure most minorities want to go back to pre-FICO credit scoring where the game was even more tilted against them. We need better systems, and I would say both FICO 9 and Vantage 4 are major improvements

 

For consumer credit, start with a baseline percentage rate, and depending on how the consumer pays back (early, late, etc), vary the rate accordingly.  Wouldn't matter if you are white or black or make $10k a year or $1 million a year, you start at the same rate. 

[Guest]

4 minutes ago, mclumber1 said:

 

For consumer credit, start with a baseline percentage rate, and depending on how the consumer pays back (early, late, etc), vary the rate accordingly.  Wouldn't matter if you are white or black or make $10k a year or $1 million a year, you start at the same rate. 

What do you do if a person defaults on their loans? Do they keep getting the base rate on new debt? Do they even get offered the loan in the first place?

 

Interest rebates make more sense. If they paid on time, give them back the extra interest you charged due to the presumed risk.

[Uaarkson]

1 hour ago, CayceG said:

 

Whatever we did before 1989 when the FICO score was introduced. It's a capitalist version of Chinese CCP 'social credit.'

Ugh yes 

[Uaarkson]

Just to be clear my credit score is 760

[Guest]

We had credit scoring and credit reports since the 50s and like…early 1900s respectively. FICO in the 90s just standardized what already existed and improved the mess that preceded it. The major issue with modern credit scoring is how it is used in areas where it’s predictive capabilities are either poor or non-existent.

 

Like, auto insurance rates, or previously mentioned issues of employment.

[TwinIon]

I don't know if we need to abolish credit scores, but they should probably only be used for credit, and even then they still need far more oversight and regulation. Everything from data privacy to transparency to the dispute process needs to be addressed. The fact that Wells Fargo can end your line of credit for any reason and have it negatively affect your credit is an obvious failure of the system to do what it was designed to do.

[SuperSpreader]

8 hours ago, sblfilms said:

What could WF do to “make it right” when they don’t run the credit reporting agencies?

Kill the program for new ppl

Notify the current program members and give them two years

Offer incentives to self close the account before then, maybe even buying out some debt. 

 

 

 

 

[rc0101]

Just to start I would make one central credit scoring system, easier to make disputes and have them resolved, free and easy to watch your credit score, automatic freeze on your account which is released via a pin, ability to have a print out from any lender showing your credit score at any time. 
 

 

As far as why Wells is doing this is that they can’t legally grow so they are getting rid of consumer assets so that they can extend and service more commercial loans is my bet.