Article
If i may condense the point made, it is that by being slow to respond CRAs exacerbate the boom and bust cycle. The pump bad credit risks, and chase those who are failing. This is interesting enough, to the terminally boring like myself. But I had a further thought.
Everyday normal people are subject to almost identical CRAs, except being mass market they are even less accurate. I can say this, having worked for both banks and CRAs in the past.
Now, surely if the faults outlined in the article are true then they are probably true for people. A graduate student will be rated as a less good risk than a 40 year old manager, but if anything the manager is far mroe likely to have hidden debts, be on the berge of a psychological breakdown, about to undergo divorec and loss of assets, be made redundant and long term unemployed etc etc.
Thoughts?