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I know it's popular to hate on credit bureaus. And I totally agree they've been horrible stewards of personal data, and they have some messed up incentives (e.g

I know it's popular to hate on credit bureaus. And I totally agree they've been horrible stewards of personal data, and they have some messed up incentives (e.g. pushing all their "credit monitoring" products - it's like making money off the problem you created), and I think there is a fair debate whether they should be public entities. Still, people rarely consider the very valuable service they provide: without them, credit would be much more expensive in this country, or not offered at all. Want to see what a world without credit bureaus looks like? Go to a 3rd world country where everything is paid for in cash. This is not a good thing - it doesn't mean that everyone in these 3rd world countries are great savers while those in the first world live beyond their means. In means these 3rd world countries don't have institutions that can help to ensure trust between lenders and borrowers. As distasteful as it may feel sometimes, credit bureaus help ensure that trust by giving histories of the likelihood of someone's ability to repay a loan. Again, to emphasize, this is not to say there are myriad problems with the way credit bureaus are currently run. It is saying the the primary service they provide (credit histories for individuals) is a good thing for society.

Mordisquitos 3y ago
You would be surprised how many 1st world countries operate just fine while having no such thing as individual credit ratings by credit bureaus.
- staringback 3y ago
  You still have a credit rating, it just isn't being shown to you.
  - Mordisquitos 3y ago
    If you count "there is no record of this person making a late payment or defaulting on a debt" as a credit rating then sure, I do have one. Other than that, the only other information a lender will use to decide whether to grant me a loan and under which conditions will be information that they will ask me to provide, such as age, proof of employment situation, and my last 3 payslips.
- hn_throwaway_99 3y ago
  I mean, not really. Here is an overview of how things work in some different countries: https://finmasters.com/what-countries-have-credit-scores/ https://finmasters.com/what-countries-have-credit-scores/ Absolutely, there are significant differences, and some are quite similar to us (Canada and the UK) others differ more significantly (France and Spain). But they all essentially have ways to record any black marks from your payment history and use that to determine your credit worthiness for new loan applications. This is exactly what I meant in my first paragraph - yes, it's absolutely the case that the US implementation has tons of problems, and I think it's fine to say these should be public or quasi-public entities (e.g. only the the country's central bank has this info, like in France), but in general, all of these countries use some sort of analogous system to credit bureaus to determine your relative risk profile.

Mordisquitos 3y ago

You would be surprised how many 1st world countries operate just fine while having no such thing as individual credit ratings by credit bureaus.

staringback 3y ago
You still have a credit rating, it just isn't being shown to you.
- Mordisquitos 3y ago
  If you count "there is no record of this person making a late payment or defaulting on a debt" as a credit rating then sure, I do have one. Other than that, the only other information a lender will use to decide whether to grant me a loan and under which conditions will be information that they will ask me to provide, such as age, proof of employment situation, and my last 3 payslips.
hn_throwaway_99 3y ago
I mean, not really. Here is an overview of how things work in some different countries: https://finmasters.com/what-countries-have-credit-scores/ https://finmasters.com/what-countries-have-credit-scores/ Absolutely, there are significant differences, and some are quite similar to us (Canada and the UK) others differ more significantly (France and Spain). But they all essentially have ways to record any black marks from your payment history and use that to determine your credit worthiness for new loan applications. This is exactly what I meant in my first paragraph - yes, it's absolutely the case that the US implementation has tons of problems, and I think it's fine to say these should be public or quasi-public entities (e.g. only the the country's central bank has this info, like in France), but in general, all of these countries use some sort of analogous system to credit bureaus to determine your relative risk profile.