The Equifax leak (which still happened and is still a problem for, well, an absurd amount of people, though it’s fallen off the news radar) should really have us question why this sort of thing is allowed to even be.
If credit scores/reports were just for credit cards, I could see a case for their existence, maybe. But that’s not what they’re just for. Rather, they’re used for credit cards, loans, bank accounts, renting, and hiring. Basically, your options are just be incredibly wealthy or have three private companies with almost zero oversight have an absurd amount of power in your life. Given the former isn’t an option for almost anyone, three companies are essentially acting as a pseudo-government. Except instead of at having to pretend to care about people, they can be as misanthropic as they want.
There’s already plenty of used reason to break them up. Monopolies, especially unregulated private monopolies, cause problems. That’s why there’s laws in place to break them up. Sometimes those laws are even enforced. There’s also laws about price fixing that are occasionally enforced. Now, whether those by the letter include non-monetary prices is not something I know, but if they don’t, there’s no good reason not to expand them to do so. Because selling your personal information to these companies is absolutely a price. It’s just also a price charged by nearly every bank, landlord, etc.
(Now, whether these reports could even function if people had options that enabled them to avoid them entirely is another question. Seeing them fail entirely seems quite alright.)
Going perhaps a bit further, though, why do a few numbers enable someone to create so many problems for someone else? Like, I understand which existing mechanisms are the source of the problem. Why not fix them? As the video below points out, the problem is you cannot change your SSN or date of birth. I really can’t see any reason why not to take the obvious solution: Allow people to change their SSN and date of birth.
(SSNs also were not originally intended for identification. Really the idea of any sort of permanent identification rubs me the wrong way. Especially the kind anyone can look up. (Or demand your consent to look up. I could see perhaps having a permanent medical record. I can’t justify, say, potential employers having any sort of (de facto) right to access your history.)
Even if we hold that we will have some ID, SSN is a terrible authentication method. Given how many forms and databases they’re in, in an unencrypted format at that, they are incredibly insecure. If we are going to have fixed identifiers, SSN seems like a good enough ID inasmuch as it’s non-ambiguous. Indeed, terrible for authentication for the reasons you listed. If someone really wanted to create havoc (and possibly make out with a ton of money in the end) they could rob a bank of all of the papers with people’s SSNs, DOBs, names, etc. and abuse those. (Or go to a rental leasing office. Or, hell, put up a Craigslist ad for a job that doesn’t really exist and have that information on the bogus application. Sure, phishing scams are bound to happen with any system (Well, TFA could be tricky to phish.) but also given people fall for them so frequently, a system wherein people’s most sensitive data can be easily and permanently stolen is ridiculous.
According to the video (I haven’t dug deeper) you can freeze your credit and then unfreeze it with a PIN you set. Of course, that also costs a bit every time because of course it does.
My favorite form (or factor) of authentication is still social, though how to make it work online or in very highly populated areas can be tricky. It’s nearly impossible to fake, though, and is more directly what we’re really doing when we identify people. We (people) are generally pretty good at identifying others. If I see someone I know I don’t need to see an ID card to figure out who they are. If someone else tries to claim to be someone I know, I can tell they’re lying regardless of any ID cards. Identifying people as themselves seems thus ideal. (The two biggest problems I’d foresee in expanding it to the current age and urban areas are the obvious just not knowing millions of people to just get a credit card or buy something online or whatever, and also presumably it’d worsen economic stratification as knowing the right people could become even more important if not handled with proper care.))
The entire problem of credit scores seems to be relatively simple: having an informational advantage over someone gives you an advantage. Of course anyone doing business with you would prefer to know everything about you. And of course you’re better off if you can keep your hand hidden. The people on the employer/loaner/insurer/banker side of the table will collude if they’re allowed. Anything done from the other side presumably has to be done via the legal system since those are very hard things to avoid.
(I suppose filling the information with noise would also do the trick. Either by plenty of omissions via options to do things while avoiding the credit reporting agencies or else by somehow filling the databases with garbage information. Similar things to the former have happened. Some people tried to do something similar to the latter with web ads (via a program to hide all ads from view while also spamming them with bogus clicks) but clearly it didn’t go so far.