Comment by adinobro | Hacker News Reader

Comment by adinobro | Hacker News Reader

China currently doesn't have a "credit score" like most of the rest of the world. They also don't have a national police database so this is their attempt to do both at once. If you look at the information these two things seem to make roughly 90% off your score.

Everything else is basically an experiment. Each district is doing it differently to find out what works the best and that will then be merged into what the country does. (The scientific process ... using data to inform policy)

I visited Guangzhou in 2018 and was expecting it to be crazy since it has "the worst levels of noise pollution in the world" https://www.theguardian.com/cities/2018/mar/08/where-world-n... but it was almost crazy how quiet the city was. After the report come out they went around the whole city putting in traffic lights and fixing up all the intersections. There is still traffic but it is now more organised than any Chinese city I have been to. I ask the locals about it and they love the cameras, the order and the reduction in noise pollution. They freely admit that without the cameras most of the other Chinese people would just not obey the road rules so they are glad that the cameras are there.

I image "social credit" will be similar. Lots of people here just don't pay bills because there is no credit history and there are no debt collectors (well not like in the west anyway). If you owe money to the wrong people then it is better to just disappear but for most companies, they have no power and they cannot do anything.

> They also don't have a national police database so this is their attempt to do both at once

China needs a national credit score. And China needs a national police database. What it doesn’t need is both tied together with a political component layered on top.

(I think there is a good chance these experiments will backfire. We tried isolating felons amongst themselves in the United States. It just led to better-networked criminals who had no choice but to return to crime.)

I'm still on the fence. A lot of the time when you run a credit score you also run a police check. Not always but often enough. I expect most of the other stuff will be too much effort to be kept in the score at a national level unless it is a token amount.

China doesn't have the same incarceration rate that the US has (I don't think anyone does). I also don't know how long the score will be impacted by a criminal history.

I'm not saying it will work. I'm just saying that because other countries have done it one way does not mean that every other way of doing it is automatically wrong.

As an expat here my current score is "B" but I'll move up to an "A" next year. I don't know if that score means anything...

Much, if not most, of the rest of the world doesn't have a credit score either.

You mean the US-style credit score, right? Because I can't imagine a country that has banks giving out loans without at least credit worthiness analyses that are essentially credit scores, but lazily computed. And lazily-computed credit score is still credit score. E.g. in Poland, we don't have "credit score", except that the bank will happily calculate it for itself whenever you ask for a loan, which means we have to keep our interactions with credits and debts in mind, the same way Americans do.

The historical norm for credit has always been offering up possessions as collateral. You don’t need a complicated credit scoring system, or reliable enforcement mechanisms for debt & fraud, you just sell off the collateral if the customer doesn’t pay the loan.

This is exactly the function that pawn shops provide in the West, although their usage has dropped significantly since the introduction of consumer credit.

That may be, but the most popular credit these days is probably mortgage loan, and I haven't heard of those being given on a collateral, at least not to regular people buying their first home. Same with consumer credit, so at this point I'm not convinced that most of the world really doesn't have (possibly lazy) credit scoring.

> the most popular credit these days is probably mortgage loan, and I haven't heard of those being given on a collateral, at least not to regular people buying their first home.

In my corner of the EU, banks require a guarantor (or even two!), plus a copy of your salary slips. And plenty of people are simply not approved.

Also, mortgages are implicitly backed by the home itself. In the worst case scenario the bank can claim the property back and sell it to recoup their losses.

What is happening in China is that most things are pre-paid or have very low hard credit limits.

You often have to pay six months of rent in advance to rent. I know lots of people that have been cut off electricity or phone service but you can get it reconnected in hours or less if you pay the bill.

The one nice thing is that there are NO late fees, reconnection fees, overage fees, etc. You just don't get service.

Ouch. I couldn’t summon 6 months of rent, and I’m pretty comfortable economically.

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