That's like when websites say I've opted into such and such just by visiting the website. It's a stretch to call something opt-in when it's unavoidable in modern life.
When you take out a loan or credit card you sign a legal document agreeing to all of the various terms. You don't sign anything when visiting a website.
Credit cards --- bona fide, revolving-credit credit cards --- are so completely avoidable in modern life that I'm a little mystified as to why people get them at all. I couldn't for most of my adult life (weak credit score) and feel like I've dodged a bullet. I have a (secured) card with a low limit now, just to rent cars, but it's gotten a lot easier to rent cars with debit cards now, too.
Heading off a routine objection to this observation: I've had a family with kids since I was 22, and spent most of the years prior to the Matasano acquisition living, if not paycheck-to-paycheck, at least pretty close to it.
I'll add: I don't know what my credit score is now --- it's probably better than it was, since I've had that dumb car-renting card for 6+ years --- but, knowing that my credit was bad enough that I couldn't get a non-secured card, including from my own bank after the wires for the Matasano acquisition cleared, and knowing that I had at the time a house and a car and all that stuff, and really no trouble ever getting a lease for any place I could afford the rent for, I find myself wondering a lot how much credit scores actually matter. If I'd thought that when I was 22, I'd say, "welp, I just don't have enough life experience to know". But I'm 42 now, and I have a bit of a hard time projecting to a point where I can see a clear reason to give a shit what number Equifax generates for me. Like, maybe I'll care a lot when I'm 62? I kind of doubt it, though.
> Credit cards --- bona fide, revolving-credit credit cards --- are so completely avoidable in modern life that I'm a little mystified as to why people get them at all.
Cash back and other rewards. They can add up if planned for properly—they aren't a life-changing amount of money or anything, but they're nice. Effectively, if you aren't using a high-fee card like American Express, you're subsidizing those of us who do use them (much to the chagrin of merchants). It's better to be on the receiving end of that subsidy, not the giving end.
> I find myself wondering a lot how much credit scores actually matter
I feel similarly mystified sometimes as I've never needed one. When my mom mentions paying off a CC bill, I think "why not just use debit?" Maybe she'll have to delay purchases or occasionally miss out on something, but it ends up being the same money.
There are also people who are below the income line of paycheck-to-paycheck, people with addictions, people who have jobs or lives with risk of injury and thus medical bills or unpaid leave for recovery, people who have a big family with needs they have to pay or travel for... and I feel people can use CCs because rich people culture pressures them to cling to things and the idea of being "successful" to attract peers and love interests... but that's just my subjective analysis.
Without a credit card, how do you buy anything online, or sign up for any SAAS? (the ones that don't accept Paypal, which is most). Using pre-paid Visa cards are possible sometimes (but not always accepted) but are also a hassle to manage as a primary payment method.
Booking travel online? All credit cards.
Renting a hotel or car can be next to impossible without a credit card to put down. Once I had to pay a $500 deposit to stay in a hotel for 1 night because I didn't have a credit card they could put on file.
You can easily get through modern life without taking out a loan from the financial system. I'm 41 years old and I've never had a home or car loan. I have credit cards, but I easily could have gotten by using debit cards instead.
So your financial history is being tracked and scrutinized. At 41, you might be able to live and die without this being a big problem. In my 20s, I worry about my ability to secure healthcare and other such necessities in my later life based on a social credit score which includes financial credit history I never opted into. Just getting on a lease is enough for a credit pull. It's unavoidable.
Yes, if you want people to loan you money at low interest rates you have to agree to the system whereby if you don't pay things back the system will keep track of that and not loan you money at such low rates again.
What’s less reasonable is that you also have to participate in the system if you want a bank account or electricity or such. Or, heck, you don’t even need that; just have some fraudster open an account with your info and you’re in.
Opening a plain jane checking account won't impact your credit report. Neither will the vast majority of accounts with electric or other utility companies.
If a fraudster does something in your name, you can get things corrected. I agree that this can be more work than it should be, and would support regulations to make dealing with this easier.
Merely opening an account won’t. But if something goes wrong and they decide you owe money, that will. It’s not a certainty, but by just opening a checking account you are taking on an certain amount of risk that your info will be reported to the credit agency.
You can get your info corrected if you’re the victim of fraud. Can you get it deleted entirely, such that the credit bureau has no record of you, as if you never existed? Or is participation in the system not actually voluntary at all?
GDPR "opt-in" consent definition also says it must be possible to "opt-out" and still receive the service.
If the data is required for providing the service, no consent is needed, but you must be able to clearly show that the data is indeed an absolute requirement to provide the service.
Someone would probably be willing to write you a loan with opaque credit history, for the right price. But that price would be so high you'd never agree to pay it. (This is not the same as no credit history. No credit history means you have not taken out any loans before. An unknown history with credit, that you decline to reveal, is far worse).
Credit reporting is an immensely valuable institution, and a lot of that value gets passed down to borrowers.
I'm comfortable with the idea that "if you take out a loan, but don't pay us back, we're going to tell other people that you're a bigger credit risk" is an absolute requirement to provide the service.
It's certainly a requirement if you don't want the interest rates on loans to be much higher.
It wasn't always a requirement! They had other heuristics before they had credit scoring databases, like, "do your parents have an account here", and, "do you have the correct skin color and religious affiliation".
The fact you don't know about it doesn't mean it doesn't happen.
I have to laugh a little at the naivete of thinking that a credit reporting company shows you everything they know about you on a credit report. They don't even show you everything they show loan companies who pull your report.