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It's a really strange phenomenon to read about. In the Netherlands unpaid debts are registered which affects your ability to get mortgages and other types of lo

It's a really strange phenomenon to read about. In the Netherlands unpaid debts are registered which affects your ability to get mortgages and other types of loans, but that is about the extent of it, and more of a flag than a score. There is no numeric value you can influence other than not having any open debts (mortgage excluded). Credit cards are really only used for purchases abroad on the internet; the whole notion of using credit cards to build up credit score is… foreign.

lotsofpulp 6y ago
It’s the same thing in the US. Credit cards are popular in the US because due to far higher payment processing, people in the US can earn lots of cash back or other rewards. Of course, many Americans also purchase things by actually using the credit on their credit cards and paying interest on it, but you can easily go through life never paying interest to a credit card company. The numeric value known as a “credit score” is simply a number that someone calculated based on your history of re-paying debts. It can exist in the Netherlands or anywhere, I can even make up my own formula. It’s probably more popular in the US than elsewhere due to its efficiency to evaluate someone’s credit worthiness for a credit card and the US using more credit for regular purchases than elsewhere, but it really isn’t something devious or magical or legislated. For example, a small retailer wants to offer it’s customers credit (i.e. lend them money), but they don’t have the underwriting staff or capability to analyze everyone’s credit history (from their credit reports). Then the small retailer may choose to simply purchase credit scores from a company that does analyze people’s credit history, such as the popular FICO score from the Fair Isaac Corportaion.

3 ms·

It's a really strange phenomenon to read about. In the Netherlands unpaid debts are registered which affects your ability to get mortgages and other types of lo

by Freak_NL 6y ago

lotsofpulp 6y ago
It’s the same thing in the US. Credit cards are popular in the US because due to far higher payment processing, people in the US can earn lots of cash back or other rewards. Of course, many Americans also purchase things by actually using the credit on their credit cards and paying interest on it, but you can easily go through life never paying interest to a credit card company. The numeric value known as a “credit score” is simply a number that someone calculated based on your history of re-paying debts. It can exist in the Netherlands or anywhere, I can even make up my own formula. It’s probably more popular in the US than elsewhere due to its efficiency to evaluate someone’s credit worthiness for a credit card and the US using more credit for regular purchases than elsewhere, but it really isn’t something devious or magical or legislated. For example, a small retailer wants to offer it’s customers credit (i.e. lend them money), but they don’t have the underwriting staff or capability to analyze everyone’s credit history (from their credit reports). Then the small retailer may choose to simply purchase credit scores from a company that does analyze people’s credit history, such as the popular FICO score from the Fair Isaac Corportaion.