I think Equifax is not, or at least not only, in the business of scoring the credit worthyness of consumers. Their main business might be selling the illusion of trustworthyness.

Banks have to convince themselves that their decisions are rational. They have to convince the governement and the public that they are not pushing people needlessly in poverty. They convince their shareholders and lenders that the money entrusted to them is well-managed.

The easy way is to outsource the core decision - and the blame for bad decisions- to a third party like Equifax. Equifax does some magical math and provides an air of rationality. As long as the system works well enough to provide the illusion of correctness while still allowing great profits, it does not matter much for anybody involved if some people accidentally get caught up in the machinery.

It's a bit like the justice system. That system has to provide the impression that justice gets served, or people will become vigilantes and serve decentralized justice themselves. Actually convicting criminals and freeing innocents is a good way to provide that impression, but it is not the only way

Huh, I assumed by the headline it was just the credit score not being a good model of credit payback. Its actually about just returning the wrong scores for people versus what their model intends.

I'd be curious to see model evaluation metrics on the former.

Shouldn't the government run any credit bureau like it does the treasury?