[zo1]

Maybe I'm missing something, but you just described a credit score system.

[mortenlarsen]

Yes. But we don't have the stupid gaming aspect where people take on debt that they don't need in order to "build a credit" score.

It is only a proof of income, outstanding debts (that you are required to reveal), and the hopefully lack of past non-payments that count. You can't "build your" score buy using a bunch of credit cards and paying every month.

I live in Europe, and do not have a credit-card (only debit) have no need for credit, since I do not spend money that I do not have.

If I was in the US, I would probably have a credit card to "build my credit".

It is like if I asked my neighbor to lend me money every month and pay them back a second later to build their trust. It is just a stupid game, with no real meaning.

[leetcrew]

there is a performative aspect to "credit building", but it's not all a meaningless game. the fact that someone has access to a $5k credit line and doesn't go crazy with it is a positive signal itself.

[bombcar]

I suppose the difference is that the bank has to refuse you in the EU system, instead of pawning the refusal off to a third party that does the calculation.

[sokoloff]

In the US, the refusal is still from the lender, based on information from zero or more credit reporting agencies.

[bombcar]

Yeah, but they always word it as blaming the agency.

[sokoloff]

That is likely a consequence of a requirement of the Fair Credit Reporting Act under which you must be told when information in your credit file is used against you to deny your application for credit, employment or insurance.

I haven’t been denied in a long time, but my recollection was the refusal was from the lender and included “we may have used information from <reporting agencies>; here’s how you can get a free copy of the information in your file…”