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My loan application got flagged by an algorithm because I co-signed for my sister 4 years ago
I applied for a small personal loan last month, $2,500 to fix my car. The bank denied it instantly. I called them up and they said an algorithm flagged me as "high risk" because of a co-signed loan from 2020 that my sister paid off early. The algorithm saw the co-sign as a liability, even though it never missed a payment and got closed in good standing. No human ever looked at it. I work full time, have steady income, and my credit score is 720. Has anyone else been screwed over by a system that can't tell the difference between helping family and being irresponsible?
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logan5251mo ago
Heard a podcast about this exact thing last week. Some bank exec was bragging about their "efficient" AI system, but it clearly punishes people for normal life stuff like helping family. The algorithm doesn't care that your sister paid it off early. It just sees a co-sign and goes nope. They're basically automating discrimination against anyone who's ever done someone a solid. Your credit score is better than half the people out there and they still won't look past a computer flag.
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charles_young921mo ago
My buddy Steve went through this exact mess last year trying to refinance his house. He co-signed for his cousin's car back in 2019, cousin paid it off two years early, no late payments ever. The AI system at the new bank just saw that co-signed loan and flagged him as "high risk" without even looking at the payment history. Steve spent three weeks on the phone trying to talk to a human who could override it. Finally got a loan officer who manually reviewed everything and approved him, but the damage was already done with the rate lock expiring. The scary part is most people don't have the time or know-how to fight that stuff.
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