I always assumed credit scores were an integral and historic part of the American financial system.
They were not, they are very recent，most of your parents didn’t have credit scores growing up, and as you can probably tell or at least intuit, it’s mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.
So the same now, except now all personal data is located in one place according to the rules they set, from which they can sell your data and preemptively block you or refuse to meet you to discuss your practical repayment capability.
All of those could be and were done before, only it wasn’t public so you had no way to also know your score.
Your hypothesis is that before computers and data centers were used in business to cross-reference, centralize, analyze and store private and public data, and before a personal credit rating system was implemented, businesses were using cross referenced, centralized, analyzed mountains of paper files on all potential consumers nationwide, directly related to their business or not, to calculate 300+ million personal credit scores that didn’t exist yet?
You’re taking more than a leap, you’re jumping right off the cliff.
Uh, okay then. Damn I’m old. Apparently. 🧐 Funny though that the younger generation cannot imagine how life worked pre-personal-computers (or even before computers entirely).
It’s the same with each generation. You probably didn’t have to take academic tests on how many bushels of carrots you could bring to market a week because you weren’t educated as a yeoman, as previous generations to you were, when that data was more relevant.
I think the younger generation understands how things worked before computers became widespread, but it isn’t relevant to there life or much of the current global order, so it isn’t at the forefront of their mind.
No, you’re just taking a binary view of history.
Yes, before you had a predetermined credit score, your credit score was assessed on a case-by-case basis. I don’t know why you think things are transparent now.
Computers are not as old as you think they are.
Yes, before you had a predetermined credit score, your credit score was assessed on a case-by-case basis.
There is transparency to the extent that the decision is based almost entirely on your credit score and credit record. You can see a copy of your credit record any time, which is a fairly new thing. You can see similar credit scores and if they turn you down for anything they are required to tell you what it was. While you may not know the calculation, you know what goes into it at least well enough. Most importantly the decision is mostly objective and consistent, by computer, driven by this data. It’s not entirely transparent but more so than at any time in history
The decision should be based entirely on your credit score on record, which is determined by factors out of one’s control.
You can assume what goes into your credit score, but the more important point is that you don’t and that is proprietary information owned by a very small amount of companies that profit from your information.
Given the above, I can’t come to the conclusion that determining your individual value based on circumstances out of your control is objective.
As for consistency, if you get sick and accrue hospital bills you can’t immediately pay, your credit rating plummets. That doesn’t sound very consistent, relevant, or objective.
uh… that’s exactly how it worked. The Wikipedia page you linked mentions credit bureaus. If you go to that page you can see they were established in the USA by the mid 1800s. Yes, it was all done on paper. That’s how the world used to work.
No, that is not how it was done. Before, The time was put in to assess the relevant data your creditworthiness.
Today if you break a leg and have a hospital bill, your chances of receiving credit are automatically lowered.
There’s a huge difference between being investigated for credit worthiness and automatically being assigned a score filled with arbitrary private data irrelevant to debt or credit.
Are you a racial minority? Your credit score probably isn’t as good as a white guy’s credit score.
https://www.federalreserve.gov/econres/feds/files/2022067pap.pdf
Assessing relevant data on an individual’s debt risk makes sense.
Collecting everybody’s private information so that three companies can determine, without ever meeting you or knowing anything about you, teally, the amount you are allowed to succeed or take advantage opportunities is b*******.
The 19th century credit bureaus and today’s credit ratings are completely different.
You’re not wrong - I was just pointing out it’s always been that way. The rich never played fair, they played to win.