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Comment by AndyMcConachie | Hacker News Reader

Just as a point of reference, in The Netherlands there is a central agency for recording the debt of people who mostly have fallen behind on payments. They only record debts that last longer than 3 months and of those delete all record of them after 5 years after being paid off. It is forbidden for this agency to record that you have a mortgage unless you fall behind on payments. Only negative information is stored on borrowers. If you pay your loan down on time nothing will be stored about you.

Also, it is forbidden for information in this agency to be used for identifying purposes by banks and the like. This means considerably less risk for me as a citizen, and it also means the information is less valuable for hackers. Mortgage interest rates are currently 1-2 points less in The Netherlands than they are in the USA, so there's no correlation I can see between America's vampire capitalism credit model and cheaper loans.

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That is interesting. Do banks have any way of telling how much debt someone has? Are credit cards very common there?

Many Americans have so much debt that lenders are very interested in the whole picture when they consider making a new loan.

Old debt do drop off American credit reports, too. For most bad marks, they only stay on for 7 years (10 for bankruptcy). I don't know how long paid off loans are reported, but they generally have no negative impact (but might impact privacy). see this blog post http://blog.readyforzero.com/how-long-does-a-bad-mark-stay-o...

EDIT: Even though bad marks are supposed to stay on only for seven years, the industry is very scummy and will often try to keep the bad marks on your report longer, requiring you to take action sometimes to actually get it cleared off. The CRA's and debt collectors don't follow the law, and we certainly need better enforcement of the laws.

>Are credit cards very common there?

Much less prevalent than in the US. There are much fewer cash back/air miles/etc credit cards...actually, literally the only I'm sure exists is that for the department store De Bijenkorf. There may of course be more I haven't seen before.

Debit cards are the dominant payment method. Credit cards are most useful for things like hotels abroad, online shopping abroad (w/n Netherlands there is the iDeal payment system for online shopping). It's not uncommon to find shops that will not accept them.

If there is substantially less consumer debt in the Netherlands, that could explain the difference in credit risk. It could be small enough there that banks just don't worry about the total load, and trust consumers to fully disclose things on their loan application.

Yes, the reselling of debt just moves it around and pretends like it's new debts, for new amounts, unless someone fights it tooth and nail.

If they don't record debt in good standing, is there anything that prevents people from taking on far more debt than they can possibly handle, other than unusual things like common sense?

FYI historically we did away with many of the debt related laws and centralization, because that could / will likely lead to debters prison. That being said, obviously things need to change, but based on your description, it's not really a credit agency. If they can't determine how credit worthy you are (historic payments are the #1 indicator), then they really don't have any information besides current debt.

your ability to pay is better determined by looking at pay slips, which a bank can (and probably will) demand from you. the fact that you paid X dollars monthly for Y years is not sufficient to determine the upper limit of your paying ability. so, i think a combination of nice pay slips + lack of defaults in the past is quite sufficient.

It's also worth noting that right now, student loan data in the Netherlands is not shared with this agency. Which kinda defeats the purpose of doing a credit check on anyone Living in the Netherlands, in their 20's and 30's.

> They only record debts that last longer than 3 months and of those delete all record of them after 5 years after being paid off

That's the same as the US, except that here they expire after 7 years instead of five.

> Mortgage interest rates are currently 1-2 points less in The Netherlands than they are in the USA, so there's no correlation I can see between America's vampire capitalism credit model and cheaper loans.

That's a rather meaningless way to look at it, because there are a myriad of factors that affect aggregate mortgage rates, and credit ratings are just a tiny piece of it.

It's like saying "Well, they keep tell me that the world is getting warmer, but it's still pretty cold in my neighborhood".

Yes that sounds like a sane system.

It's worth nothing that though that this breach also affected some non-US citizens as well, most reports mentioned UK residents and Canadian residents as well.

but how do you gamify borrowing then?

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