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Comment on Anon tries to understand credit scores

I’m Australian, and this post prompted me to research the US Social Credit system. The score can determine whether or not you’re accepted for home rentals, and even determine whether or not you qualify for medical treatments

You need to engage in having debt and credit in order to appease the score.

I bought an apartment recently, and I’ve never had a credit card or debt of any variety. When I was younger my bank would dip into negatives or reject a payment fairly regularly. In the US that could probably cost me a place to live.

And apparently the entire credit score is built up and perpetrated by these massive corporations? Like Credit Score is not even anything to do with the government, and yet it has such a pervasive effect on people’s lives and their behavior.

It’s straight up creepy. Dystopian vibes. How do Americans tolerate this?

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TubularTittyFrog@lemmy.world ⁨15⁩ ⁨hours⁩ ago
because you deeply misunderstand it.

it basically lets lenders know if you have a history of paying back your loans or not.

it’s that simple. and in the USA medical treatment often requires loans.

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- taygaloocat@leminal.space ⁨8⁩ ⁨hours⁩ ago
  Then why do you need to engage in having debt and using credit cards to have a good score? If having no credit score is nearly as bad as having a bad credit score then something is wrong.
  
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  - TubularTittyFrog@lemmy.world ⁨8⁩ ⁨hours⁩ ago
    when i hire someone for a job, how do I know they have experience without being able to verify they have held previous employment in a similar position?
    
    the point of the system is to show you have experience and you pay back your debts. it’s not that anything more than that.
    
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PolarKraken@lemmy.dbzer0.com ⁨1⁩ ⁨day⁩ ago
It’s so much worse than I think you even realize, but you definitely nailed some of the key pieces.

It’s correct that we don’t opt in, that it’s strictly private companies (3 of them), and that modern life in the US makes it impossible to avoid playing this game.

Some additional details:

the 3 companies each keep their own records - usually they match each other closely, but not always

wrong information in the consumer’s credit report is arduous to correct and basically 100% the consumer’s responsibility - too fucking bad, whatever outcome this may cause

the only way to know if our info is being used to fraudulently open accounts is to periodically check these reports (noting the difficulty in correcting them)

malicious use is such a problem that all 3 “services” (“extortion rackets” is literally more accurate) recommended “locking” one’s credit with each of the 3, so no accounts may be created at all

many stories of kids finding out their parents loaded them up with debt, very difficult to overcome

the score is a measure of how much lenders can expect to profit off you - financial decisions that are good for the individual are not necessarily good for the score

evictions, like other records, stay active for 7 years I believe, and having an eviction on one’s record makes every part of renting worse and harder

And nothing I’ve said is even recent insanity, all of that’s been true a long time. It’s really staggering just how effectively the US has systematized destroying our working class. We’ve been the global leader in innovating oppression for decades, it’s been interesting watching the rest of the world start to catch on just how severe it is here.
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Knightfox@lemmy.world ⁨1⁩ ⁨day⁩ ago
First off, it’s not a social credit score, it’s a financial credit score, we’re not talking about the system China has for it’s citizens.

As with many of these deep dives on Americanisms, what you’ve found is generally worst case scenarios and also not universally applicable. Some states have restrictions on what your credit score can be used for and how it can impact you, car insurance and rentals being a prime example.

Also, by simply having a credit card (and not using it!) and not having any lapsed debts (collections or reported unpaid bills) you will easily have a score in the mid to high 700s. If you carry a balance month to month but regularly make your minimum payments you will have a credit score in the low to mid 700s. Hell. my wife had 5 bills in collection and still had a 650 before I met her.

As far as credit score applicability, it’s often referenced by businesses as a measure of risk. If you have a 650 instead of a 750 your car insurance might be higher because your risk of payment is higher, but we’re only talking about 10-15% more per year (US south east). Same with with rental, if you have a bunch of bills in collection or default your score will be bad, but a rental provider will be less willing to provide you service if you have a history of not paying your bills. You should still be able to find a place to live, but it will likely be more limited (for example if you have a 400, but not if you have something like a 650) or you may have a larger security deposit.

Overall your credit score likely won’t be an issue 95% of the time, but if you habitually don’t pay your bills then your score will go down and businesses that check your score won’t want to do business with you. I can’t make this clear enough, you have to be deliberate in your actions if you want your score to be low enough to cause a problem. My wife had $15k in student loans, $10k in credit card debt, and 5 unpaid bills that had been sent to collections and she still was in the 600s. The score system exists for a reason, I would argue that it should be a bit more forgiving, but the reason it exists is fair.

Non US citizens might have trouble relating to this, but people in the US take blatant advantage of systems a lot of times. I have a coworker that moved for a new job, but he didn’t want to sell his house because he got it at a good rate and time. He listed his house for a decent rate and his first tenant stopped paying after the second month. He waited until 4 months hadn’t been paid to take them to court and it took another 6 months to have them removed. Just before they were going to be escorted out by the sheriff they paid him the entire back rent in cash to try to prevent the eviction (they had the money the whole time!) After they were evicted he reached out to the local municipality for the water account and they found out the tenant had bypassed the water meter (basically they were stealing). The municipality then said he had to pay to fix the bypass, penalized him for the stolen utilities, and said that for any future tenants he would have to keep the account in his name rather than having the tenants file it.

American credit score systems suck, but they are generally fair and they prove themselves necessary because a certain percentage of Americans seem to have fundamental problems with following common and decent rules of this world.

I just read an article the other day that said Gen Z has the highest rate of credit card fraud ever seen in US history. As a group they just don’t see any issue with ordering something online and then saying it never arrived and reversing the charges. I’m all for saying fuck the system and down with corporate interests, but it’s hard to have a functional modern society that casually commits fraud and theft.

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- kieron115@startrek.website ⁨1⁩ ⁨day⁩ ago
  Back in my day we just wrote bad checks! (I’m kidding, I’ve never even owned a checkbook unless it was a starter pad that came with the account)
  
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  - Knightfox@lemmy.world ⁨1⁩ ⁨day⁩ ago
    Good old check kiting, the respectable fraud!
    
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KingPorkChop@lemmy.ca ⁨1⁩ ⁨day⁩ ago

How do Americans tolerate this?

Brainwashing. Americans don’t realize they live in a Dystopian shithole where, since the 80s, the rules are made by the rich to keep the common person down.

We’re coming to the end game of this now.

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Socialism_Everyday@reddthat.com ⁨1⁩ ⁨day⁩ ago
To be fair, the fact that you haven’t heard of any Aussie credit is because companies keep it private to themselves. They definitely have financial information on you and utilize it to decide the interest rate on your loans.

Much less horrible than the US dystopia for sure tho

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- kungen@feddit.nu ⁨1⁩ ⁨day⁩ ago
  Yeah, I would consider that somewhat “acceptable” usage though. It’d be irresponsible to approve a large loan to someone who’s already extremely overindebted, for example.
  
  Sweden’s system doesn’t have a specific number like the US, but mostly just shows economical health. How many active loans you have, income over the last few years, and if you’ve had loans go to the enforcement agency. But we have the same sickness as America: if you have had something go to the enforcement agency within the last 3+ years, it’ll be basically impossible for you to rent an apartment (as if it wasn’t difficult in the first place).
  
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