I always assumed credit scores were an integral and historic part of the American financial system.
They were not, they are very recent，most of your parents didn’t have credit scores growing up, and as you can probably tell or at least intuit, it’s mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.
Credit scores didn’t exist but credit bureaus date back to the mid 1800s in the USA. Also, as others have mentioned creditors would do their due diligence and try to assert that you would be able to pay back your loans by doing many of the same things they do now.
This really isn’t some new, crazy concept like you’re making it out to be. The score has only simplified the process.
The score simplified the process for creditors of pre-assessing your risk as a debtor so that they don’t have to put in the work to actually assess your rush a debtor, leading to an irresponsible and imbalanced credit system that you can’t benefit from unless you are born on the right side of the tracks.
I didn’t say the concept was new or crazy.
This is a way for operators of capital to accrue more capital and more easily distance themselves from everybody else, whose information they profit from, rather than creating opportunities.
I am not on our mortgage on the house that I own with my husband. I am employed, full time. At the time I had no debt, and the car loan was in my husband’s name.
They told me I couldn’t be on the mortgage because I had no credit score.
that’s how it works. you have no credit history you can’t be trusted wiht a major loan like a mortgage.
you need credit history.
Bank-internal credit scores existed since 1965 at Citibank… Then some Citibank employees formed their own company, FICO, to sell scores to banks without data or computing power to do so
In the Netherlands this would boil down to:
That’s it. The BKR system only tells you any outstanding debts (such as a car or phone to pay off) or if you stil owe significant money to debtors. It doesn’t tell you how long you’ve been a good citizen.