Ask anybody who immigrated to the US, it's a royal pain. (Especially since you have global brands - like e.g. Mastercard - incapable of referencing their data from outside the US).
You start with a secured credit card for $200. Next, you buy a clunker of a car for all-cash. At that point, you have enough history to get a CC with $500-$1,000 limit. Now you pay everything through that CC. And make damn sure you're always 100% on time - a single slip costs you a lot of time setting up that history. After a year or two of that, you usually get a CC covering one or two months of income. Keep building.
It's a really painful process.
This was ~6 years ago so YMMV
Basically, I can only conclude that we are encouraged to be 'good citizens" by borrowing money and paying interest on it while slowly paying back the principal. People who live on a cash-only basis, which was considered to be a respectable practice not that long ago (borrowing was shameful) have terrible credit scores.
So what, you may ask?
There are very real and increasing disincentives to having bad or no credit. Creditworthiness (in the form of a nice, easy to understand number) is being taken more and more by various entities as a sign of responsibility and even good character.
A credit score is now used by some entities, beyond the mainstay car dealers, to judge risk and character: apartment rentals and employers, to name two.
I'm not suggesting that all employers and apartment management companies do this, only that the trend (I have no citations but it should be searchable) is on the increase.
The bottom line is that in the USA today, credit scores depend on how - and how much - you borrow and repay.
Furthermore, the higher your credit score, the better you are treated, to a degree: better rates on loans, no problems getting a job (all other things being equal), and so on. The opposite is true for bad scores.
This is one of the many ways we are corraled into greasing the gears of the economy, and it is a wasteland for cash-only operators (unless, I suppose, they have a huge amount of cash).
Welcome to the new consumerism.... Being Thrifty, having savings, and generally being responsible with your income is bad. The Government does not like it and punishes you with low/no interest on savings and inflation that outpaces that savings, Banks hate it because they would rather you spend spend spend so you need their loans to live above your means so they can not only get interest but maybe you will also over draft on your checking and they can kill you in fees.
Retail shops hate it because they need to sell you increasing amounts of cheaply made poor quality product you must replace every 12-18 months
The economy lives and dies with debt. If everyone started saving and living with in their means tomorrow the national economy would come to a screeching halt and we would have a depression that would make 1929 looks like a boom year
The only exception is mortgage which is usually the only loan people take their entire life. And it’s possible to get it without having a credit score. You’ll need your complete history of employment and addresses and based on that bank can borrow you money. Perhaps car leasing is another loan people might take but that works similar way.
Borrowing money to buy everything seems to be an American fetish (but also present in U.K. which is most America like part of Europe and Asia, not continental Europe though). It always seemed insane to me to have to borrow money from bank to buy a latte or groceries.
The only place I use a credit card is online. So i can pay quickly and worldwide.
[1] Not actually true, because I find the convenience of the card is worth it - but I understand people taking the opposite position.
It was annoying as even though I setup automated direct debit I simply didn't have peace of mind. I don't trust HSBC systems to be bug free and a bug in their software which would not process by direct debit is something I'd keep worrying about. Much better not to have this additional subconscious stress.
But if you are in UK or Germany or country like that there is no need for credit card really. Debit cards are ubiquitous and work everywhere (UK banks will give you a proper Visa/MC debit card, not some Mickey Mouse debit card which only works in ATMs).
There's no need, indeed. But as I said, a month's grace on paying for everything and free plane tickets every so often.
The fallacy of needing to use debt for day to day living is ruining people.
For instance, you did not refer to yourself as "we".
I'm not the same person I was when I was 30 years younger, and I'm not the same person here that I am in person. Those differences are differences in Identity. It doesn't matter if you want to call the 'different facets', because the only thing that matters is that they are distinguishable, and thus not the same identities. Your understanding of Retra is as much an understanding of me as it is an understanding of 2-year-old me.