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FICO to incorporate buy-now-pay-later loans into credit scores

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277 points cebert | 2 comments | 24 Jun 25 00:03 UTC | HN request time: 0.471s | source
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alkonaut ◴[24 Jun 25 13:40 UTC] No.44366161[source]▶
Does anyone else live in a place where there isn't a visible "score" for how valuable you are, but rather only a "credit check" for how risky you are, which is performed if you apply for new credit (buying anything with an invoice, getting a credit card, or taking any other kind of loan)? Meaning that if you have a good income and no history of failing payments, you are basically passing the check with flying colors, and will have the same "score" as someone who has had tons of well-served credit before?

This thing where the score as in "risk" and score as in "business opportunity for lenders" is intertwined, and creates weird incentives for consumers, is that only a US thing or do any other countries have something similar?

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1. bananalychee ◴[24 Jun 25 18:15 UTC] No.44369068[source]▶
Credit scores in the US function similarly to this risk assessment you describe, with the caveat that there is no standard way to measure risk without a credit history. In my experience, it does not take very long to establish that baseline, and there are inexpensive vehicles to do so, such as secured credit cards. Small-scale lenders are likely to accept alternative documents like income statements or proof of payment history to qualify. FICO scores, as imperfect as they are, merely simplify the risk assessment process.
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2. alkonaut ◴[24 Jun 25 19:29 UTC] No.44370028[source]▶
I suppose it may be related to the overall "looser" grip on who exists, and what counts as collateral. If I "default" on a loan, the lender is still pretty safe to get back most or all of it, since any loan is secured by my future income. So there's not as much need to prove my credit history - my income is public and always was, and my future income is collateral for any loan, including mortgages if my house is suddenly under water in a recession.

That means that barring any failures to service credit in the past, I don't need a history of successfully servicing credit in order to get credit.