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> In order for him to clear his debts, Kong argues, he needs to be able to succeed at his new business – but that is hard to do if prospective partners and cust

by moosey 8y ago

> In order for him to clear his debts, Kong argues, he needs to be able to succeed at his new business – but that is hard to do if prospective partners and customers shun him because of his official status as a “deadbeat.” This is awful. Totally admit it, they shouldn't do it, etc. About the same as being a released felon in the United States. We also allow financial information to be pulled for background checks in the United States: > A check of a candidate’s background may include employment, education, criminal records, credit history, motor vehicle and license record checks. From https://www.hireright.com/background-check-faq/answers/what-does-a-background-check-consist-of/ https://www.hireright.com/background-check-faq/answers/what-... We already have what is functionally a social credit system in the United States, you'll find the people suffering under it getting harassed by ICE boarding greyhound buses.

gamblor956 8y ago
Not even remotely similar. China's rating system is government-mandated. In the US, the credit rating system is a creature of, and controlled by, the market. The US imposes very weak regulation on the credit ratings companies for individuals, and almost none at all on the credit ratings companies for businesses.
- ordu 8y ago
  It is a very american thing to say. I mean "it is bad, because it is regulated". Why? I suppose that social credit system of China is abused to make life of political opposition harder, but the article discussed is not about it. It shows case of a failed debtor. And for him it doesn't matter if social credit system is regulated or controlled by the market. What does matter for him is what impact this system has to his life. What opportunities to repaid his debt this social system closes for him? In some ways US credit system seems worse for me. The only way to get into it is to get a credit. But what if I do not like to pay interest rates? If I'm higly conscious and I can put down my impulses to buy things, to consume for the sake of consumption, to live on pennies while building a capital from scratch? It wouldn't work, because of this system. There are no way to demonstrate your credit reliability and trustworthiness to a system except paying interest rates. At the same time in China a person has non-financial ways to build up her social score. There are a bad sides, of course, like brutal punishments to those, who've hit negative scores, and it completely makes China's system unattractive for me, comparing with the US one. Seems that China's system is less tolerant for a risky behaviour, while US system just put you on rails of debt and gives you no other way. The latter seems less disgusting for me, but I'm glad that I have not to deal with any. And as outsider for both I really see no big decisive difference between them, they seem for me very similar.
  - ConceitedCode 8y ago
    Seems like there is a misunderstanding about the US credit system. Paying interest has 0 impact on your credit score. Plenty of ways to get a credit card without credit history (secured credit cards are typically easiest) and as long as you pay it off before the statement due date (typically 28-60 days after the charge) then you will not be charged any interest while building credit. Here's a quick overview of how a US credit score is calculated - https://www.equifax.com/personal/education/credit/score/how-is-credit-score-calculated/ https://www.equifax.com/personal/education/credit/score/how-...
    - ordu 8y ago
      > Plenty of ways to get a credit card without credit history (secured credit cards are typically easiest) and as long as you pay it off before the statement due date How it works? What the reason for a bank to give credit without interest? I just do not believe it. System must have a way to get interest. If system says it charges no interest, it means that interest payments are hidden. Either behind transactions fees, or by fixed costs covering maintanance of credit card, or by some other ways.
      - buttcoinslol 8y ago
        > How it works? ... Either behind transactions fees, or by fixed costs covering maintanance of credit card, or by some other ways. You're correct, US credit card companies do still make a profit on those of us who pay off their balance in full every month and therefore pay no interest.[1] Visa/MC/Discover/Amex all charge the merchants a percentage (~2%) to process a credit card transaction. I have a cashback card with no annual service fee which pays 1.5% cashback. Let's say I spend $10,000.00 on this card in 1 year. Visa will collect $200.00 in merchant fees, pay me $150.00 in cashback, and gross profit of $50.00 on my account for 1 year. Some cards charge an annual service fee which adds to the gross profit. [1] It's possible there are some people who are a net loss to the card issuers due to gaming the rewards systems, but generally the issuer will make money on someone who pays $0 in interest.
      - solidsnack9000 8y ago
- ceejayoz 8y ago
  > Not even remotely similar. China's rating system is government-mandated. Neither one is really optional, so does it matter?
  - thoughtstheseus 8y ago
    In some ways yes, in others no. There is a difference between having the possibility of optionality (you can try something else if you want) and it being completely not optional.
    - ceejayoz 8y ago
      We don't really have the ability to "try something else" when it comes to the credit bureaus, barring becoming a hermit. (Which would work in China's case, too.)
- P_I_Staker 8y ago
  You say that, but that makes little difference to the person that can't get a job, rent an apartment, or drive. Background checks are ubiquitous in the USA. This is relatively new, to the point where a recently departed colleague was shocked. He hadn't changed jobs for 15 years... That's not a crazy long time.

by moosey 8y ago

gamblor956 8y ago

Not even remotely similar. China's rating system is government-mandated. In the US, the credit rating system is a creature of, and controlled by, the market. The US imposes very weak regulation on the credit ratings companies for individuals, and almost none at all on the credit ratings companies for businesses.

ordu 8y ago
It is a very american thing to say. I mean "it is bad, because it is regulated". Why? I suppose that social credit system of China is abused to make life of political opposition harder, but the article discussed is not about it. It shows case of a failed debtor. And for him it doesn't matter if social credit system is regulated or controlled by the market. What does matter for him is what impact this system has to his life. What opportunities to repaid his debt this social system closes for him? In some ways US credit system seems worse for me. The only way to get into it is to get a credit. But what if I do not like to pay interest rates? If I'm higly conscious and I can put down my impulses to buy things, to consume for the sake of consumption, to live on pennies while building a capital from scratch? It wouldn't work, because of this system. There are no way to demonstrate your credit reliability and trustworthiness to a system except paying interest rates. At the same time in China a person has non-financial ways to build up her social score. There are a bad sides, of course, like brutal punishments to those, who've hit negative scores, and it completely makes China's system unattractive for me, comparing with the US one. Seems that China's system is less tolerant for a risky behaviour, while US system just put you on rails of debt and gives you no other way. The latter seems less disgusting for me, but I'm glad that I have not to deal with any. And as outsider for both I really see no big decisive difference between them, they seem for me very similar.
- ConceitedCode 8y ago
  Seems like there is a misunderstanding about the US credit system. Paying interest has 0 impact on your credit score. Plenty of ways to get a credit card without credit history (secured credit cards are typically easiest) and as long as you pay it off before the statement due date (typically 28-60 days after the charge) then you will not be charged any interest while building credit. Here's a quick overview of how a US credit score is calculated - https://www.equifax.com/personal/education/credit/score/how-is-credit-score-calculated/ https://www.equifax.com/personal/education/credit/score/how-...
  - ordu 8y ago
    > Plenty of ways to get a credit card without credit history (secured credit cards are typically easiest) and as long as you pay it off before the statement due date How it works? What the reason for a bank to give credit without interest? I just do not believe it. System must have a way to get interest. If system says it charges no interest, it means that interest payments are hidden. Either behind transactions fees, or by fixed costs covering maintanance of credit card, or by some other ways.
    - buttcoinslol 8y ago
      > How it works? ... Either behind transactions fees, or by fixed costs covering maintanance of credit card, or by some other ways. You're correct, US credit card companies do still make a profit on those of us who pay off their balance in full every month and therefore pay no interest.[1] Visa/MC/Discover/Amex all charge the merchants a percentage (~2%) to process a credit card transaction. I have a cashback card with no annual service fee which pays 1.5% cashback. Let's say I spend $10,000.00 on this card in 1 year. Visa will collect $200.00 in merchant fees, pay me $150.00 in cashback, and gross profit of $50.00 on my account for 1 year. Some cards charge an annual service fee which adds to the gross profit. [1] It's possible there are some people who are a net loss to the card issuers due to gaming the rewards systems, but generally the issuer will make money on someone who pays $0 in interest.
    - solidsnack9000 8y ago
ceejayoz 8y ago
> Not even remotely similar. China's rating system is government-mandated. Neither one is really optional, so does it matter?
- thoughtstheseus 8y ago
  In some ways yes, in others no. There is a difference between having the possibility of optionality (you can try something else if you want) and it being completely not optional.
  - ceejayoz 8y ago
    We don't really have the ability to "try something else" when it comes to the credit bureaus, barring becoming a hermit. (Which would work in China's case, too.)
P_I_Staker 8y ago
You say that, but that makes little difference to the person that can't get a job, rent an apartment, or drive. Background checks are ubiquitous in the USA. This is relatively new, to the point where a recently departed colleague was shocked. He hadn't changed jobs for 15 years... That's not a crazy long time.