Your Credit Score Isn't a Reflection of Your Moral Character. But the Department of Homeland Security Seems To Think It Is. (slate.com)

What kind of person racks up debts and doesn't pay them? Your credit score is an attempt to answer this question. A report elaborates: These important three-digit numbers summarize our statistical risk for lenders. The allure of the credit score is its clarity: It cuts through appearances and converts our messy lives into an easily readable metric. The difference between a score of 750 and 600 is obvious. One is an excellent bet for a lender to make; the other is not. On balance, credit scores have made borrowing more convenient, and fairer, for consumers. But the U.S. Department of Homeland Security wants to use credit scores for an entirely different purpose, one they were never built for and are not suited for.

The agency charged with safeguarding the nation would like to make immigrants submit their credit scores when applying for legal resident status. The new rule, contained in a proposal signed by DHS Secretary Kirstjen Nielsen, is designed to help immigration officers identify applicants likely to become a "public charge" -- that is, a person primarily dependent on government assistance for food, housing, or medical care. According to the proposal, credit scores and other financial records (including credit reports, the comprehensive individual files from which credit scores are generated) would be reviewed to predict an applicant's chances of "self-sufficiency." The proposal is open for public comment until Dec. 10. Setting aside the proposal's moral abdication when it comes to the needy, we should be troubled by another injustice: its abuse of personal metrics.

Comments

Assumtions galore

[magarity]

Does this assume that the country from which the immigrant originates is sophisticated enough to have credit scores? Does it assume that an immigrant already in the US and applying for citizenship already has a work authorization and is building a US credit score?

Re:Assumtions galore

[Freischutz]

Does this assume that the country from which the immigrant originates is sophisticated enough to have credit scores? Does it assume that an immigrant already in the US and applying for citizenship already has a work authorization and is building a US credit score?

Look on the bright side, this only lasts until you become a citizen. Once you are a US citizen the reflection of the content of your character that is your credit history becomes so completely unimportant that even a man who has bankrupted six casinos, welshed on god knows how many loans leading to him being treated as a leper by the entire world banking system except Deutsche bank and Russian Mafia owned money laundering factories masquerading as banks, a man who has been convicted of money laundering, cheating people out of their hard earned money with a fake university and is currently being investigated over his fake charitable foundation can become president. If DJT's credit history was an accurate reflection of the content of his character he should be a cloak wearing Sith lord with, dead eyes, pale wrinkled skin like a Shar-Pei that can lift tanks whit his mind and shoot lighting from his fingertips and not the mere sleazebag hack that he is.

Re:Assumtions galore

[Gavagai80]

Many people have no credit scores simply because we don't borrow. I have no credit score because I've never felt like spending more than I have. But that actually does identify me as poor and as a bad consumer -- the middle class and wealthy always have debts for their houses and cars, whereas the responsible poor may never experience debt.

Re:Assumtions galore

[Baloroth]

Never borrowing is not really a good sign of financial responsibility. Aside from the fact that using credit cards that you pay off every month actually gives you money (through rewards programs*), borrowing money for expensive purchases you could not otherwise directly afford can allow increased financial opportunities you'd not otherwise have. Taking out a mortgage to buy a house in an area where prices are rising, then selling it later. Or taking out reasonable amounts of student loan debt to get a degree that allows you to find better paying jobs. Even taking out a loan for a car allows you to take jobs you'd otherwise not be able to get to at all.

*You could argue that if people didn't use credit cards, everything would be cheaper (since merchants wouldn't have to pay credit card fees) and so it's a net negative for consumers. While that may be true, given credit cards do exist and are widely used, not using them yourself to gain rewards is financially irresponsible, since costs are the same to you whether you pay cash or not.

Re: Assumtions galore

[backslashdot]

Except the founders of some of our best tech companies came from welfare or refugee families. In other words, if say we didnt allow Steve Jobs biological dad into the country because he was muslim we wouldnt have Apple. If we didnâ(TM)t like muslims from dirt poor third world countries like Bangladesh one of the parents of Youtubeâ(TM)s cofounders wouldnâ(TM)t have been in. If we didnt like refugees we wouldnt have allowed Sergey Brinâ(TM)s family in. If we didnt like people whose family would go on foodstamps we wouldnâ(TM)t have allowed one of Whatsappâ(TM)s cofounders into the country. And these are just the ones I know about offhand.

Re:Assumtions galore

[squiggleslash]

No, because that's not what's being asked. I did a double take when I read it too.

Generally speaking, immigration in the US has three stages: some form of temporary residency (examples would be a sponsored work visa, or a student visa), followed by permanent residency (a green card, given to people who want to live here for the rest of their lives), followed by citizenship.

The last is often thought of as the "easiest" to get because it just requires a test and a swearing in, but in reality it's the hardest because it needs the applicant to pass the other two hurdles first. The first is relatively easy, the second requires either a lot of money (hard for most of us), an employer who can demonstrate you're significantly more talented in a specific field than normal (harder than it sounds, this isn't the H1-B "Can't find anyone who isn't asking for a six figure salary we can't afford" test, though Melania Trump got in this way, so there's that), or marriage/family.

Before anyone points out otherwise, it's occasionally the case, though rare, that someone will immediately apply for a green card without spending any time in the US with which to get a credit record. My mother would be an example, I sponsored her green card shortly after I got my citizenship. But that's relatively rare, and means the information will be absent when the immigration authorities make a determination (so they'll have to ignore it), not that they'll divide by zero and dump a corefile.

Back to the proposal: What they're proposing to do is modify the test between first and second.

Now, the summary claims they're introducing a new "moral" test, but that's actually bullshit. Part of the green card requirements is that you're going to be able to support yourself, there's no risk you'll end up on government anti-poverty programs, and typically they send a stern letter to your sponsor making it clear they will be on the hook if you turn out to be a deadbeat. How enforceable that is is another question, but the principle - you should be able to support yourself if you want permanent residency - isn't new. And, to be honest, it's not even a bad one.

So... is using your American credit score, calculated on the basis of several years of living in the US, going to answer that question - notably whether you're capable of supporting yourself? By itself, no, but it certainly is reasonable for a government determining whether someone should be allowed to live here permanently should use information from your credit score as a part of that determination. If you're not paying your debts, then there's a high risk you'll not support yourself.

There are many concerns - punishing asylum seekers for seeking asylum by permanently stealing their children and placing them in torture camps being the most obvious (and to you shitty apologists itching to claim that because ICE separated a handful of families, suspected of child trafficking, during the Obama regime, this means it's normal or Obama's fault that the Republican regime has used it instead to deter asylum seekers by doing it to literally thousands of refugees, I sincerely hope you all die in the most painful way possible, you are utterly shitty people and the world would be better without you) - I have about the US immigration system right now. There is absolutely nothing whatsoever wrong with this proposal. It makes sense. Immigrants should be self sufficient. Using a credit score as a part of a determination for that is a perfectly reasonable way to help ensure that.

Re:Assumtions galore

[Kjella]

Never borrowing is not really a good sign of financial responsibility.

It depends on how and why, if you're living in a rented apartment in a big city where your daily needs are met by public transportation there's no inherent reason you should have a loan. Yes, you could try to game credit cards but it's a hassle and the time and effort it takes could probably be spent on other cost cutting measures too like taking advantage of sales, cooking your own food, better maintenance of things you own and so on. Taking out a loan to speculate in property value is certainly possible, but the only guaranteed savings is being your own landlord. Would you really sell your house, even though it fits your needs and you've spent years furnishing and customizing it simply because you think prices have peaked? I doubt that, so the vast majority sit through both the ups and downs.

Loans that are proper investments with a ROI or long lasting items you essentially "write off" in your own bookkeeping make sense, like you're buying a car to drive for the next ten years but it has to be paid today. A mortgage in the "safe zone" of the property value (<60% around here) for a low risk customer should have a <1% post-inflation interest, that's a small price for having the money now rather than later. What I don't understand are the people who owe like 1-2 paychecks, zero safety buffer and pay >10% interest. In all but the most dire circumstances I'd cut back enough to get out of that red zone, both for my own peace of mind and the savings. But I've got a friend who's constantly living on credit and he's got this huge urgency of things he'd like to spend money on and is only waiting for the paycheck to come in. I simply think he doesn't worry, tomorrow's problems can be fixed tomorrow.

Mod headline flaimbate

[Anonymous Coward]

TFS says nothing about "moral character".
Furthermore, no argument is even being made here that there is no correlation between credit score and likelihood of becoming a public charge. The writer just doesn't like the proposal.

Moral character?

[Anonymous Coward]

Is there a correlation between credit score and being dependent on welfare? Yes, there is a negative correlation. As the credit score decreases, the likelihood that the person is on welfare increases.

So if as a matter of policy a country wants to take in fewer people who will be dependent on welfare, then credit score is a reasonable data point which could help with that.

I could understand a country making policy that they don't care whether the people they take in are dependent on welfare, in which case credit score perhaps shouldn't factor into their equation, but that's just a matter of policy; there's nothing wrong with using credit score or any other data point to achieve whatever policy goal you want.

In other words, argue the policy. Should we or should we not care about immigrants getting dependent on public welfare?

There are interesting moral and financial arguments here. But zeroing in on credit score specifically is a waste of time.

Re:China vs US

[PeeAitchPee]

Nonsense. Credit scores are used to assign a risk to a borrower. The higher a person's credit score, the more likely it is that they will pay back what they borrow. Unlike China's "social credit," credit scoring is is rooted in real actuarial science. We've already seen what happens when credit scores and the like are ignored and money is just lent out to anyone regardless of their ability to ever pay it back (the mid-2000s housing crisis, and today's student loan crisis) just because "it's the right thing to do." It is a bad thing financially for the country (any country, not just the US) to import a bunch of dependents who are statistically highly unlikely to be able to provide any value to society beyond "diversity." Unlike previous generations of immigrants, there are very few opportunities for unskilled laborers in the United States. If you are hellbent on bringing them here, you better have a real plan for paying for them.

Re:No they don't

[PeeAitchPee]

Your credit score (vaguely) indicates whether you earn a paycheck, are self sufficient and pay your bills.

Not exactly. Your credit score indicates how likely you are to pay back what you borrow -- that's it. It's perfectly possible (and sadly common) for people that make a lot of money to be terrible borrowers and default on loans, or declare bankruptcy, etc. Conversely, it's also possible to make a rather modest paycheck but have a high credit score -- those are usually the people who never forget to pay a monthly bill, don't run a credit card balance, etc. Finally, you have to actually borrow money every once in awhile and pay it back to really build your credit score. That's how you "prove" that you'll actually pay back what you want to borrow, and why banks look very carefully at your credit card payment histories, etc. They literally have this stuff (managing financial risk) down to a science.

Yep, total flamebait

[raymorris]

Indeed, total flamebait.

The proposal (which may be bad or good, that's for another post) is:

Try to estimate the likelihood that the person will becime financially dependent on the taxpayers, by looking at their finances.

It's nothing about moral character. THIS proposal is about the financial cost to tax payers. How many financially dependent people we want to bring in is a related, though different, discussion.

Financial dependence isn't "moral character". My daughter is 100% dependent on me financially*. She has high moral character. She's four. The headline is crap.

I suppose someone *could* make the argument that having a habit of borrowing money and not paying it back is a moral weakness, but the authors of the proposal make no such statement. They argue that people who are financially a mess are more likely to become a drain on the tax payer.

* My four year old daughter regularly asks for jobs she can do to earn money for extra toys.

Re:China vs US

[guruevi]

If you were a legal migrant you would know that the DHS (INS) already looks at your self sufficiency before allowing you entrance. That is a process that can take up to a year to complete, making it easier by taking a statistical predictor of success and self-sufficiency makes the process easier.

As a legal migrant, your life is fully vetted before entry, integration into American culture, diseases (you need to submit full birth and medical records and have an American doctor vet you personally), criminal activity predictors and self sufficiency (income, savings and a social network) predictors are some of the biggest things they look at. Hence why illegal immigration is such a big issue (feelings of unfairness) across legal migrant populations (including Hispanics).