TIL credit score is a real thing in a Western country - I always figured it was some thing hypothetical. Looks scarily too familiar to the Social score from some Black Mirror episode, or the alleged Chinese system if you ask me.
If the court system worked at all, you could just pull court records checking for judgments saying the applicant defaulted on a loan.
That won't work because courts are too expensive, and also because it's less profitable than extortion via debt collection.
Also, it would prevent the banks from creating protection rackets (no house for you unless you have and use credit cards!), or being "accidentally" racist/classist/etc (oops! The algorithm says your type need not apply. Our hands are tied.)
Especially when the only reason that credit line was taken out was because they leaked your SSN and DOB during a period when their CISO was a music major.
But the FCRA protects these liars from consequences, so here we are.
Cold ideological dismissals like this that ignore what is actually happening to people are making me increasingly bitter. It's almost like you're saying "Let them eat cake."
No sense in getting offended at the idea someone is saying you’re dishonest.
It is offensive when "unforeseen circumstances" is casted as "dishonesty." This kind of thing is routinely done to criminalize the poor.
It would go a long way.
Can we at least make the government take a financially literacy class first? It is the biggest debtor in the world.
Having debt isn't the problem. Defaulting on it is, and the government doesn't do that.
If an individual goes broke wracking up medical debt, "Too bad. You should have been more economically useful." If the government goes broke, "Uh, it's no problem."
I get it. They were trained to despise individuals and worship institutions. They stop singing this song when they get edged out of the system though. I've met many middle aged programmers that gave up all hope in life because they lost their economic value.
Hope you people aren't one of them.
Maybe local bank managers having connections to the local community, and actually knowing their customers, rather than sitting behind opaque algorithms and data brokers, wasn't entirely a bad thing after all.
How do you buy a car on a loan for example?
It's not perfect but unlike both your examples it isn't based on things that could be consider political. You can't lower your credit score by attending a protest for example. Or posting things for or against causes on the internet.
I am just honestly wondering what else is our there? It has always seemed like a tool that can be used by both individuals and lenders.
The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.
When the stock price dropped and started to make margin calls on the loans, some of the banks had to take a loss as there wasn't enough liquidity to sell into.
banks don't like to be in this sort of situation - in this particular case, the banks just didn't do enough due diligence presumably.
A car loan is collateralized so I don't really see what's complicated.
That's a pretty serious offense and it's extremely uncommon over here.
Sure, repossession can be costly but debt collection agencies will make your life hell very quickly, it's not something you can drag for years without big consequences.
Drivers don't like passengers like me, who want to get into a car, put on a seatbelt, and have the driver keep their eyes on the road until the destination.