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I agree; The credit score system is full of abuse. But, and I ask this genuinely, what’re the other options? If I’m a bank that’s has never heard of Joe Schmo

I agree; The credit score system is full of abuse. But, and I ask this genuinely, what’re the other options? If I’m a bank that’s has never heard of Joe Schmo (who’s asking for a credit card), how do I know how much credit to give and at what interest rate? Sure, I could give them a very low limit and high interest rate, and both would improve over time, but if my competitor next door can extend $5k at 15% by looking at Joe’s credit score, why would Joe come to me? The reason credit scores exist is because there’s a market for that information, and the three companies took advantage of that. But because of that market, abuse had to be controlled, and Congress produced the FCRA. But even with that, there’s still the mess we have today.

hyperman1 4y ago
Afaik in Belgium, and in most of th EU, there is a credit registry, managed by the governement. If you have too much debt, you get on a blacklist and won't get off until enough is paid back. While far from perfect, it seems a lot better than the USA system. But it requires a functioning ID system and some trust in the governement.
- _23sd 4y ago
  The idea of a government run debtor blacklist has been thoroughly demonized in America for the past decade through news stories about “social credit” in China. Maybe it works in Europe but if you wanted something similar in America it’s going take a long time for people to forget that stuff, even if it was sensationalized.
  - enlyth 4y ago
    Because private companies such as Experian and Equifax have worked out so well. Surely they have had no instances of massive data breaches or anything that would impact millions of individuals adversely.
- Mountain_Skies 4y ago
  The government threatened to cut people off from the water and sewage system if they didn't agree to pandemic rules. In the USA it is expected that any power the government achieves will eventually be abused to harm non-compliant citizens. In this case, if you don't agree to the whims of a bureaucrat, you lose access to credit. With the current system, that wasn't an option, but it's been made clear that any power they get their hands on, they will abuse. As long as that's the case, people will prefer the current broken system run by sociopathic corporations over one with the government in control.
  - powerhour 4y ago
    > The government threatened to cut people off from the water and sewage system if they didn't agree to pandemic rules. I did some searching and wasn't able to find any information about this. Do you remember where it happened or where you read about it?
humanwhosits 4y ago
I'd argue that many people don't need credit at all outside of a mortgage, which really should have a real investigation into your financial situation anyway.
- bediger4000 4y ago
  We used to have that. It was clubby and racist. If you went to church with the banker, you got a mortgage. If you didn't and your last name was uncommon or Slavic or something, you didn't get a mortgage.
  - positr0n 4y ago
    My reading is humanwhosits is just proposing what we have today, which doesn't have those problems. When you get a mortgage today they verify your assets, debts, and income. There's less of a need for a score if they're already doing all that.

hyperman1 4y ago

Afaik in Belgium, and in most of th EU, there is a credit registry, managed by the governement. If you have too much debt, you get on a blacklist and won't get off until enough is paid back. While far from perfect, it seems a lot better than the USA system. But it requires a functioning ID system and some trust in the governement.

_23sd 4y ago
The idea of a government run debtor blacklist has been thoroughly demonized in America for the past decade through news stories about “social credit” in China. Maybe it works in Europe but if you wanted something similar in America it’s going take a long time for people to forget that stuff, even if it was sensationalized.
- enlyth 4y ago
  Because private companies such as Experian and Equifax have worked out so well. Surely they have had no instances of massive data breaches or anything that would impact millions of individuals adversely.
Mountain_Skies 4y ago
The government threatened to cut people off from the water and sewage system if they didn't agree to pandemic rules. In the USA it is expected that any power the government achieves will eventually be abused to harm non-compliant citizens. In this case, if you don't agree to the whims of a bureaucrat, you lose access to credit. With the current system, that wasn't an option, but it's been made clear that any power they get their hands on, they will abuse. As long as that's the case, people will prefer the current broken system run by sociopathic corporations over one with the government in control.
- powerhour 4y ago
  > The government threatened to cut people off from the water and sewage system if they didn't agree to pandemic rules. I did some searching and wasn't able to find any information about this. Do you remember where it happened or where you read about it?

humanwhosits 4y ago

I'd argue that many people don't need credit at all outside of a mortgage, which really should have a real investigation into your financial situation anyway.

bediger4000 4y ago
We used to have that. It was clubby and racist. If you went to church with the banker, you got a mortgage. If you didn't and your last name was uncommon or Slavic or something, you didn't get a mortgage.
- positr0n 4y ago
  My reading is humanwhosits is just proposing what we have today, which doesn't have those problems. When you get a mortgage today they verify your assets, debts, and income. There's less of a need for a score if they're already doing all that.