[will_brown]

>One’s past payment performance is a huge predictor for the future.

And I’m sure China could easily argue prior social behavior is a huge predictor of future social behavior.

But the real problem in the US is you have an entire class of people who have no credit history (the poor), not bad credit history, but no credit history.

You aren’t wrong if I’m lending money I’d want to know debt to income ratio, but why does that matter to getting a job? If you have no credit history and can’t get a good job, how do you think that is going to effect your income and access to credit. Look at the studies of impact of credit history, it facilitates keeping poor people poor (limits social mobility).

[Just_Smith]

To elaborate on your point a little further, because I think a lot of people truly don't understand this: having no credit is worse than having bad credit, so the argument that being conservative with your finances is all you need is blatantly wrong and tone-deaf. My first apartment cost me $500/mo. The deposit to turn on power was $100, $300, and $500 for good, bad, and no credit respectively. I had no credit, because I didn't think I was making enough money to take on a credit card payment. Thus, I ended up paying more than $1500 to move into a $500/mo apartment.

I made the fiscally responsible choice to not take on debt I could not afford, but I was punished more than if I had indebted myself. I got a credit card shortly after, and naturally spent years trying to keep up with the payments that I couldn't afford at the time. Anyone that cannot see the clear trap being laid here is doing so willfully.

[rubyfan]

Those deposits are just that, deposits - you get those back. They are in lieu of a credit report. The ability for utilities, property owners and other institutions to provide services and goods that people might choose not to pay for is in fact _enabled_ by the credit system. It’s not your God given right to access these services. The credit system enables many people to leverage their recorded credit history without putting up capital in the form of deposit. It’s actually a _social good_ that puts better liquidity into the system and provides access.

Also regarding building credit, don’t spend beyond your means and you’ll be OK. Many people use credit cards for perks and rewards and pay their bill off at the end of the month. No one is forcing you to spend beyond your means.

[Just_Smith]

I'm not criticizing the existence of deposits, but increasing the size of deposits for high-risk customers is without a doubt a cash-grab on the poor. Deposits exist to protect the issuer of the property from a potential delinquency. When it comes to turning off someones power, the cost is fairly the same (and the cost of travel certainly doesn't increase by a fibonacci-esque rate).

Plus, I wasn't living beyond my means. Paying a power deposit equal to one month's rent is not within most peoples' means. I recently paid $50 to turn the power on in my $1400 apartment.

That aside, I'm also not sure you understand the circumstances if you think being "forced to spend beyond your means" isn't something that people in poverty regular have to go through. I'm at a place now where I can afford a credit line, but that's not the case for a lot of people. Those people shouldn't be punished from abstaining. A credit line is a commitment, no matter if you can make your payments or not

All-in-all, I think the credit system has a slew of good intentions going into it, but it has had a quite a few negative effects in regards to the poor and essential utilities. It's also used to drive where a lot of businesses set up shop (I work for one - thanks, Experian) - so the idea that this Chinese social credit system is far removed from our financial credit system just isn't true. It's not directly applied to social lives, but it's overall effects on a person's social life are abundantly clear. If anything, the financial credit system could end up being more sweeping and inter-generational, but that remains to be seen.

[exolymph]

At any level of expenditure you can get a credit card (products targeted to people with no credit exist!) and pay it off like clockwork on a monthly basis. Which builds good credit. You could use it to spend $5 and still do this.

[seanmcdirmid]

Actually in China you don’t need a credit check to get an apartment, you only need to pay 3 or 6 months in advance instead (I nean, you pay in 3-6 month chunks).

Likewise, there was no credit extended for things like power, you were expected to pre-charge your power instead.

Being a good and obedient communist isn’t a very good predictor of anything but itself.

[rubyfan]

You can argue about the side effects or extended uses of credit reporting all you like I suppose. The reality of the credit system in the US is not a government driven activity. The market has created a behavior incentive to pay your bills and that’s one most are happy to live with. By contrast I can chose to disagree with whatever social campaign the government wants to dream up yet still operate as a private citizen. I am free to disagree without harming my ability to rent, take a loan or board an airplane. In a government centralized behavioral rating system you are beholden to the arbitrary rules of a political bureaucracy. Today it’s stopping at traffic lights, tomorrow video games, the next day alcohol consumption, oh and you get extra points if you showed up to cheer for the political party in power...