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Nunc Dimittis

Not Enough History

On credit cards.


It was there, apparently, for years, growing and shrinking, changing and being changed, without my having any say in it. It is not a tumor; it’s my credit score.

Recently, I thought I might buy a house. So, I contacted a mortgage lender who specializes in first-time home buyers. We chatted about my income and how much home I hoped to buy. Then he asked casually, “Do you know about what your credit score might be?” I said, “Not really,” and explained that I had typically spent my own money instead of borrowing other people’s. “It sounds like you’ve been responsible,” he assured me. “Your score is probably good. I’ll pull the report and get back to you.”

A day or two later, he told me the report had come back with no credit score at all. “Not enough history.” Flummoxed, I did some research. Evidently, there are three major credit bureaus from which one can get a report, and they all let you track your own score with an app. One bureau showed me a score in the mid seven-hundreds, another about ten points higher, the third a little lower. I wrote a sizzling email explaining that I did have a credit score—two or three, in fact!—and demanding to know why he couldn’t read them himself. He called back, apologetic, and explained why none of those numbers actually counted. I didn’t understand. It sounded extraordinarily arbitrary.

When credit scores came into fashion in the 1950s, they were intended to make loan approvals less arbitrary. Before that, local credit bureaus or the lenders themselves investigated a person’s trustworthiness by asking businesses whether the applicant usually paid—not a very “data-driven” approach. Unfortunately, many applicants suffered racial discrimination and other unfairness at the hands of lenders who simply didn’t like them. When an engineer named Bill Fair and a mathematician named Earl Isaacs teamed up as Fair, Isaac, and Co. to create the FICO® score, it should have removed the bias from lending. The middle twentieth century was an optimistic time, the age when everything was becoming more hygienic, more scientific. Why not remove the handshakes and hearsay from the lending game and replace them with a consistent calculation?

Seventy years later, our optimism has finally begun to wane. Algorithms are made in the image of their flawed creators, and they can make mistakes. Sometimes, an algorithm that prices used cars says they’re worth more than they were new. Sometimes, perfectly innocent social media posts get flagged for “misinformation” or “sexual content.” And in 2019, Shift Credit Card Processing found that black Americans have the lowest average credit score of any racial group. An algorithm cannot commit sins of racism, but it can only work with the inputs fed to it. Generational poverty is fed into the mill, and the mill grinds out a low credit score.

Why does this matter so much? Maybe poor people shouldn’t borrow anyway; poverty plus debt equals more poverty, right? Unfortunately, we have a very credit-based market, especially when it comes to buying the most valuable thing most people ever buy: a home. Owning a home, or even having a little equity in a home mostly owned by a bank, is usually a significant financial asset to a family. The wealthy even buy spare homes as investments.

But for the rest of us, buying a home means borrowing. To borrow, one must have a credit score. To have a credit score, one must have borrowed before. Call it catch-740. The lenders don’t see you, they see the number. Six hundred forty-seven? Sorry, the minimum for this loan is six-fifty. Borrow elsewhere and try again later.

As for me, I contacted other lenders who advertised “alternate credit” mortgages, offering to provide extensive documentation of all my very responsible transactions going back years, and met brick walls; the alternative to a good credit score is just having lots of money. “I’m sorry,” one lender apologized, because he has no control over whom he lends to. I wished he would chat with my friends or get references from my coworkers, talk to the people who trust me and hear that I’m trustworthy. But personal character doesn’t enter into it. I am just a number.

Rachel Hoover writes instructions for software products by day and articles for various Catholic publications by early evening from her home in Nashville, Tennessee.

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