OK – not sure about this, but it has a distinct “deja-vu” feeling in my book – and if one has been in this business as long as I have, it’s clearly not pointing to anything good here.
The decision by the three major credit-reporting firms— Equifax Inc., Experian PLC and TransUnion—could help boost credit scores for millions of U.S. consumers, but could pose risks for lenders. The reports and scores often help decide how much consumers can borrow for a new house or car as well as determine their credit-card spending limit.
The unusual move by the influential firms comes partially in response to regulatory concerns. The three reporting bureaus rarely tinker with the information that goes on credit reports and that lenders consult to gauge consumers’ ability and willingness to pay back debts.
So let me get this straight. We’re going to make it easier for people to access credit (a good thing) by artificially boosting their credit rating (a bad thing)? Reminds me of the pre-housing bust period, where everybody and his dog got approved for NINJA loans, in the name of “democratization of access to housing”, and we’ve all seen what that has brought us. We’re still digging out of that one.
Maybe useful to read the latest Orchard stats on marketplace lending charge-offs by quarter as per the article here: