[alistairSH]

Honest question, what do other nations do to determine credit-worthiness? There has to be some sort of risk assessment on the part of banks and other financial institutions. And that risk assessment would have to be made for immigrants there as well, presumably with less/zero data?

FWIW, as much as Americans complain about the credit score system, it's mostly not a problem (for most people, most of the time). It's not hard for a middle-income person to earn and maintain a top-tier score (800+) and the lowest possible APRs when borrowing.

And assuming a prospective employer would assist you with finding housing, it's not hard for an immigrant to begin building their credit score. Just make sure your landlord reports rent to the credit agencies and take out a credit card. 3-6 months later, you have a decent score.

Identity theft is a real problem, but that extends well beyond the credit agencies.

[BrandoElFollito]

You go to a bank (people often go their bank with some expectation of a better rate) or you use check online comparator to see what deal you can get.

Then the bank will look at your current funds, the job you have, the earnings you have and after some abracadabra they will say yes or no.

There is no building of trust the assessment is on what you have and what you are capable of.

The credit is usually 1/3 of your salary (at least in France) and you novadays have to provide about 20-30% of the total amount.

[alistairSH]

It's also worth noting there is no singular credit score in the US. There are (at least) 3 agencies that generate credit reports. The "score" is usually the FICO score, but there are versions of FICO Score, and other scores.

In France, how doe a lender know if you have other loans/debt outstanding? Or if you have a history of non-payment? Those two make up the majority of a credit score (35% payment history, 30% debt burden). And the credit score is just one piece of an overall credit report.

[BrandoElFollito]

There is the "trust" component first: in your request, you list all your credits and the fact that you have failed a payment.

Then you provide the bank with your last three bank statements and your salary. They match the money movements with what they expect to see (a salary coming in, a payment going out, ...)

Finally, there is a centralized database of failed payments.

It works well, we do no have special problems with credits and how they are paid off (what helps is that there are compulsory insurances and protections for the credit-taker)

[listenallyall]

Honestly, I have no idea how other countries' banks make loan decisions. But I wouldn't be surprised if "after some abracadabra" involves reviewing some kind of centralized credit history.

[BrandoElFollito]

(copied from a sibling comment)

There is the "trust" component first: in your request, you list all your credits and the fact that you have failed a payment. Then you provide the bank with your last three bank statements and your salary. They match the money movements with what they expect to see (a salary coming in, a payment going out, ...)

Finally, there is a centralized database of failed payments.

It works well, we do no have special problems with credits and how they are paid off (what helps is that there are compulsory insurances and protections for the credit-taker)

[listenallyall]

> some kind of centralized credit history

> there is a centralized database of failed payments

exactly what I assumed, and pretty much the same as how the US credit-check system works.

[BrandoElFollito]

The difference is that we do not have a score and that there is an implicit trust in your declarations. These declarations are somehow checked for major inconsistencies but that's all.

There is no history of credit and the note in the centralized database is removed when you actually pay (this is then rather a "database of people who are currently late in their payments")

The other thing is that we do not have the problem of "I know your SS# so I can take a credit" - it requires all kinds of bureaucratic gymnastics.

[listenallyall]

> we do not have a score

of course you have a score, it's just implied rather than explicit. how many missed payments? how much were those missed payments? that's the score.

> an implicit trust in your declarations

...but we still look you up in the central database ;-) sure, we trust you