The problem with criticizing the credit scoring system, as Colin and some others have sensibly pointed out in the comments to the previous post, is that it arose in order to avoid something that may well have been worse: the Good Old Boy/Country Club network that effectively denied access to capital at a decent rate to anybody not in the clique, no matter how credit-worthy they might be.
Credit scoring improves on the former system by at least introducing the possibility that a responsible person of means from outside of the club might, by merit of their high credit score, gain the same privileged access to capital. So it's slightly less exclusive. Yay.
Most people will still be denied credit at a reasonable rate. So if these two strains of Potterism are the only options, then most people are screwed.
But and so, I don't believe these are the only options.
Consider both systems from the other side, from the lender's perspective. Both of these are bad for business because both artificially limit your pool of potential borrowers. Both prevent you from making or even considering many, many good loans. Loans that would be repaid, with interest, at a nice profit.
Maybe you're OK with that. Maybe you just want to be a boutique lender, skimming only the safest, easiest business off the top. Like in the old joke, you would "only lend money to people who don't need it."
The problem with that approach is that most people do need it, so most people would have to take their business somewhere else. And that somewhere else could do very well for itself serving all of the people your boutique has turned away. Unlike you, they would have to work for a living. They would need loan officers capable of doing more than glancing at three-digit e-mails from TransUnion, Equifax and Experian. They would need to think and to decide — two things the lazy boutique model does not require. But it's still not rocket science.
Now, you take this loan here to Ernie Bishop. You know, that fellow that sits around all day on his brains in his taxi. You know. I happen to know the bank turned down this loan, but he comes here and we're building him a house. Why?
Why not? He's got a steady job, the house is collateral, so the question isn't "What's his FICO?" The question is, "Do you want to let this man give you $50,000 over the next 30 years."
Old Man Potter and his FICOfiliac heirs would leave that money on the table. They won't take Ernie's hard-earned money precisely because it is hard-earned. That's bad business.
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