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Comment by Iknowsecurity | Hacker News Reader

The credit system sucks. But has anybody created a better alternative yet?

Yes! Germany and I presume other European countries have a much better system.

The main difference is that there is no magic number that any one can use to borrow money in your name. Lenders have to verify a person's identity using ID.

Further more, to get loan you don't have build up a score first. You could get a margage if you have never borrowed money in your life but have a stable income.

> You could get a margage if you have never borrowed money in your life but have a stable income.

Same in the US, although it's a bit of a pain in the ass. It's my understanding, though, (correct me if I'm wrong!) that Germany is a bit less thrilled about credit than most other countries—even in Europe.

I don't think so? Germans have less credit cards, but they are still borrow money in the form of overdraft loans on their bank accounts.

No, they don't, just as most Americans will always pay their credit cards in full. Overdraft loans have terrible APR, as does credit from credit cards.

Credit management is big in Germany through SCHUFA and other companies and queried much more liberally. E.g. every time you purchase something online the store will likely check your credit and determine available payment instruments (this is pre-purchase) based on the response.

For remote identification we have for example post ident:

Article is in english: https://www.deutschepost.de/en/p/postident/identifizierungsv...

Most countries don't have credit scores at all.

There's typically a single public entity that holds insolvency records within the legal framework. In some countries nobody can query it but yourself; you're therefore asked to submit a copy of your record in some occasions.

As for solvency, when you sign a lease or contract a mortgage, you're asked to submit proof of income.

(Someone mentioned Germany earlier, it's a terrible example in my opinion, Schufa isn't much different than the US credit agencies, albeit more accountable hopefully).

Yes, many times. It is not that hard to not base your entire banking system on a single number anyone can use.

What gives banks right to consider SSN an authenticator?

Is there a law allowing that?

Common sense suggests it should only be possible if user explicitly accepted "I agree that knowing my SSN is enough to prove it's me and I agree to be liable to any debts created with just my SSN presented".

But isn't your SSN given by the government? Does the US government require anyone to sign such an agreement before they get an SSN? Without it, a bank claiming I owe them money because "we got your SSN" is fraudulent, plain and simple. Report the bank to the FBI.

But that's probably far too sensible European thinking.

I regularly keep hearing reports of how the US handling of money is basically medieval with some badly thought out insecure bits pasted on top. And some of that gets exported! It sucks that I need to own a credit card to be able to make international purchases on the internet. Why is there not an international version of iDEAL?

You misunderstand US law. Yes, someone can use my SSN (along with other private information) to create a debt. That doesn't make me liable. If it shows up on my credit report, I can disclaim responsibility using existing legal protections. As long as I truly didn't create the debt, it is the debt holder's problem.

But the problem has been created; which you've got to fix by paying at least in your time spent solving this.

What you're saying is probably true in any country; but in reality imo it's way easier not to allow that to happen in the first place.

Note that this is a great question to ask about all the f*ed up things in the USA. Hardly ever asked though for some reason. Having been the country that landed people on the moon seems to have removed the option to ask if other countries have better ways of doing things.

As far as I know, USA is the only country that uses such terrible credit system. In most other countries credit rating is controlled by the government itself or is at least heavily regulated. I haven't encountered any problems with my credit system -- nobody can check my credit rating without my prior written (or digitally signed) permission and I can login online anytime to see who has checked it. Furthermore, once in a year I can get a complete, free report to explicitly see how my credit rating is calculated.

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