Credit scores are used as a proxy for Ideal Citizenship. It just so happens to have baked into it enough plausible deniability as to not run afoul of anti-discrimination laws.
Turns out, a lot of "bad" actions result in missed bill payments.
In a semi anonymous society how else do you suppose one should determine the creditworthiness of someone?
It used to be the merchant had to know you and you had to build up your credit with each merchant over time. Credit scoring made it easier for merchants and customers to issue and leverage we credit.
My comment might come off as an indictment of credit scores. But it really isn't.
They absolutely solve the problem that you are pointing out. But they also serve to kind of solve a whole class of other problems around identifying behaviors that correlate with bad credit scores.
For example, if you're a land lord who vehemently opposes divorce, it's possible to use a poor credit score as cover to deny renting to this middle-aged guy who is clearly just gone through one.
...Excuse me? Is there a way that could be better rephrased?
What was the option for what? You're replying to a post about discriminating against a divorcee, but having the landlord hide it behind the justification of "bad credit".
Not to be the missing antecedent police, but are you referring to by 'ther option' the pre-existing excuse to paper over arbitrary discrimination, or to practice of lending/renting in general?
The answer is sadly important to the final assessment of meaning. I don't think you mean the former, but I figured I'd be daft and ask.
I hear ya. A landlady could very well find out someone is an Antivaxxer who lost their good job and took a lesser job and now has degraded credit and may deny the lease or may want bigger advance.
What do you suppose is a better tool you have or would build which hides this person’s history but can vouch for their creditworthiness or lack of it?
>What do you suppose is a better tool you have or would build which hides this person’s history but can vouch for their creditworthiness or lack of it?
I'm still lost on the part where we're stuck on having to be able to lookup a datastore managed by some private party in order to facilitate these arrangements?
I have no interest in perpetuating the credit bureau system. If you're convinced that it's some priceless fixture we must have, then we can talk about setting up a public Bureau; with strict regulations around what type of information they collect, how it is used, how it is dispensed, etc, security measures around its access, but most importantly, synchronous notification of the reported on by the Bureau, with services provided to the notified to aid in prompt remedy, or failing that a means dispute or correct fraudulent information.
Other than that, I object vehemently to these types of datastores. Welcome to investing. Them's the risks.
I've worked in finance. Finance for its own sake is not high on my list of things to facilitate. I also prefer discriminatory people be required to appear discriminatory.
I don't know how you can avoid discrimination. By nature of credit you have to discriminate the creditworthy form those who aren't credit worthy. On the other hand, sure, we don't need to know if someone voted for Biden or voted for Trump, is for vaccines or isn't for vaccines. You're still not providing a way for a creditor to make a judgement on someone's creditworthiness. A creditor, lacking that information may have to require advances or "security" payments which is more burdensome for the poor.
Looks at the how Japan handles apartment credit. It's a different system but in my estimation its a worse answer than Credit Bureaus are.
Is this actually true, or is it the case that you can't get financial related jobs because your credit score has been lowered by your past cases of poor handling of money?
You really think it's because of activism and not because a lack of personal financial literacy is good for the oligarchs and more time spent teaching other subjects is also good for the oligarchs (employable skills)?
Failure to navigate a capitalist system of hoop-jumping due to lack of funds causes a self-fulfilling prophesy of poor performance at said hoop-jumping and associated poor credit scores. Blaming the victim comes to mind.
If I only pay my bills on time does my credit score go up in the US? Asking because I don't know, but if that is the case, not sure why you can call it 'hoop jumping'.
I don't care for the credit companies, they're total scum. But I'm not sure how to do anything better.
Afaict, your credit score will likely be lower if you haven't had a credit card open for a long time, run your balances too close to the limit (available credit) on those cards, or don't use them at all. My understanding is that your bills, depending on their type, may not even bother reporting to the credit agencies, or only report when they believe you have failed to pay; reliable ones seem to be big loans like mortgages, student or auto loans, and then credit cards. Rent, utilities, etc haven't seemed to affect my credit positively (or if they do they haven't been noticeable compared to the first category)
When I graduated, rented, and paid all my student loans off early and did not have a credit card my credit score actually went down significantly until I opened credit cards and used them regularly.
Average age of accounts is a pretty big factor in credit scores. Every bank will probably have its own proprietary rules for deciding when to offer credit, but the credit reporting agencies who generate a number use fairly well known criteria. Amount of credit, number of accounts, payment history, percentage of credit used, age of accounts, diversity of types of accounts.
Yep, that's all that's required for it, no hoops to jump through. The only catch is if you don't have any debt, you can't build credit, but it's pretty simple to get a credit card and pay it off every month.
Try to build credit with a secured credit card and on a minimum wage. Decide which bills you have to pay late this pay period. After years of this, you’ll be lucky if you can convert to an unsecured credit card, let alone maintain your (low) credit score, let alone improve it.
Most folks in US can’t even afford a $400 emergency expense. Good luck doing even that when your credit is maxed out and your car breaks down so you can’t work.
We are discussing facts, not just your own personal circumstance. The fact that you are not in these situations does not discount the experiences of others to the contrary.
If they're credit bills, yes. If they're just phone, power, rent, etc, not unless you've specifically set them up to go to the credit reporting companies.
While this is true on a very shallow level, most landlords are happy to rent to "high risk" tenants with increased deposits if you talk to them directly instead of taking your initial rejection at face value.
More and more rentals are being gobbled up my big corporations. Finding someone to talk to who has the authority to make an exception can be nigh impossible.
Eh maybe. I think that largely depends on where you live. Granted, most apartment complexes are falling into that category, but venture out of the city a bit and if you're renting a small 2 bedroom house for $750/mo in Nebraska, it's probably owned by an individual.
Worst case scenario, even in a city, you could sublet or get roommates while you rebuild your credit.
The difference between a credit score and a social credit score system is one is based on debt payment history and the other based on political dissent & debt payment.
Currently saying "Lets Go Brandon" doesn't drop your credit score, in China you may lose quite a few points for posting that pesky bear that likes honey.
Having an arrest on your record is enough to bar your from job and housing, even if charges were dropped or you were found not guilty. That alone is enough of a chilling effect to affect behavior: for example, staying away from protests or not questioning a police officer.
A criminal background check is not connected to your credit score and a convicted criminal charge is not the same as political dissent. Stop moving goal posts.
I was arrested once and I got the charge expunged with community service. Hasn't affected my job applications so far.
In the civil context, which you obviously intended, this true. Unfortunately many people are (back) in jail because they can't afford to pay criminal court fines/probation fees
> In the US, fines are mostly meaningless if you are poor as debtor prisons are (rightfully) illegal.
You're overwhelmingly correct, however someone is going to shortly reply to your comment with a link to a story about how someone somewhere got jailed over a debt and how debtor prisons are making a comeback. It's extraordinarily rare in the US.
Social credit score is about how close you hew to proscribed behavior at large.