Is it possible to abolish the credit system?

[The Alma Mater]

Considering most western countries have a very different credit system to the USA - to wit: ones that actively DISCOURAGE you to use loans for daily expenses - sure.

But banks will need *a* method to determine if you are a safe investment.

[Risottia]

Is it possible to abolish this,

Do you mean credit issued to consumers, or credit issued to enterprises?
The former would require ending consumerism, the latter ending capitalism.

yes, under a marxist system, the world will be a paradise without any currency or payment tracking system whatsoever including the credit system

You really don't know how communism is supposed to work, right?

[Page]

We should at very least abolish credit reports.

Credit reporting is one of those things we all think is normal but is actually super fucked up. What is a credit report made of? Data. Your data that you did not give permission to be shared. And businesses and landlords use this data to their advantage.

I propose that no person or entity should be allowed to pass on an individual's credit data to any other person or entity without explicit permission, and seeing as there is no sense in one granting permission without an incentive, anyone who wants to collect your credit data should be offering you compensation.

Better yet, imagine if hundreds of millions of people all had the class consciousness to deny the data, because while selling the data is just a short term gain, if all the landlords and businesses had no data from anyone, they would lose so much of their power.

[Durkadurkiranistan II]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

Japan has credit reports; pretty easy for lenders to pull up a report with the CIC. What Japan doesn't have, however, are credit scores. Lenders typically give more weight to other stuff, like salary, time with current employer, etc.

Ultimately, we need a system for evaluating credit worthiness. Else, moral hazard would cause interest rates to soar for all (way above and beyond what we're currently seeing in the bond market), and credit would dry up.

src: live in Japan, work in fixed income trading

[The Alma Mater]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

Japan has credit reports; pretty easy for lenders to pull up a report with the CIC. What Japan doesn't have, however, are credit scores. Lenders typically give more weight to other stuff, like salary, time with current employer, etc.

Ultimately, we need a system for evaluating credit worthiness. Else, moral hazard would cause interest rates to soar for all (way above and beyond what we're currently seeing in the bond market), and credit would dry up.

src: live in Japan, work in fixed income trading

Many countries simply have a central register that shows how many contracts for credit one has. The more you have outstanding, the less you can borrow additionally.
Some also slap some extra info in if someone has a tendency to not make payments; but no detailed ratings.

To wit, the Dutch system:
All outstanding loans except for mortgages are registered in BKR. That shows the credit limit, when the contract started and if there have been serious issues (on a scale where "1" is "is 6 months or more behind" and 4 is "vanished without paying and could not be tracked down").
Mortgages are registered seperately in the land registry.

There is a standard (thouh rather complex) formula to calculate what someones maximum outstanding debt should be; going over that requires a motivation by a financial advisor or the bank will deny any additional loans.
It also means that borrowing 10k for a car will *vastly* reduce the amount of mortgage you can get; so people are directly discouraged to live above their means.

[The Blaatschapen]

Well, my credit score dropped from 780 to 620 in two years. Why? I paid my bills on time, paid off my house, and took out zero loans.

Abolish it. This is insanity.

That's idiotic.

Here in Germany, one's credit score improves if you pay off your bills on time.

[Ethel mermania]

So then no one gets a loan. How is this better?

[Risottia]

Well, my credit score dropped from 780 to 620 in two years. Why? I paid my bills on time, paid off my house, and took out zero loans.

Abolish it. This is insanity.

That's idiotic.

Here in Germany, one's credit score improves if you pay off your bills on time.

In Italy we don't even have credit scores - at least unless you specifically ask for a reviewer to issue a valutation of your own "merito creditizio".
We have a "Registro dei cattivi pagatori" (literally "registry of the bad payers") where people who fail to repay their debts are listed, so that no one else will give them further credit.
Sadly this doesn't happen with companies or with the public administration (which is usually the worst payer around).

[The Orwell Society]

As a 14 year old kid, I don't have much experience when it comes to this, but from I've seen, credit scores do more bad than good if you compare them to options like background checks.

[Meadowfields]

yes, under a marxist system, the world will be a paradise without any currency or payment tracking system whatsoever including the credit system. if you want to see an end to the credit system, begin adhering to the teachings of karl marx and embrace communist thought and the soviet union's great and positive legacy

Did you know that you can be a Marxist and criticize the Soviet Union? Not in your mindest, no. Apparently Orthodox Marxists, Eurocommunists, Centrist Marxists, Austromarxists, Reformist Marxists, and Marxist-Leninist-Maoists don't exist.

[The Blaatschapen]

That's idiotic.

Here in Germany, one's credit score improves if you pay off your bills on time.

In Italy we don't even have credit scores - at least unless you specifically ask for a reviewer to issue a valutation of your own "merito creditizio".
We have a "Registro dei cattivi pagatori" (literally "registry of the bad payers") where people who fail to repay their debts are listed, so that no one else will give them further credit.
Sadly this doesn't happen with companies or with the public administration (which is usually the worst payer around).

Yeah, in the Netherlands we also have a bad payer registration (called BKR) .

Credit scores or similar only comes into play when asking a mortgage.

In Germany the credit score is called Schufa. It's mostly relevant when renting a place to live.

[The Nihilistic view]

So then no one gets a loan. How is this better?

Presumably it would coincide with a crash in asset prices for things like property. But will it help I don't know, maybe a house that goes for 600,000 now will only go for 200,000 with no credit facilities. However if before you could buy that house with a 100,000 mortgage deposit before you now need to save up twice as long to be able to buy it.

So I guess as always it depends on the situation as to whether it's better or not. If you have a lot of cash in the bank you would be quids in though.

[Ethel mermania]

So then no one gets a loan. How is this better?

Presumably it would coincide with a crash in asset prices for things like property. But will it help I don't know, maybe a house that goes for 600,000 now will only go for 200,000 with no credit facilities. However if before you could buy that house with a 100,000 mortgage deposit before you now need to save up twice as long to be able to buy it.

So I guess as always it depends on the situation as to whether it's better or not. If you have a lot of cash in the bank you would be quids in though.

A 66% crash in real estate values, would throw this country into a massive depression just about every pension fund and bank would fold

[The Blaatschapen]

Presumably it would coincide with a crash in asset prices for things like property. But will it help I don't know, maybe a house that goes for 600,000 now will only go for 200,000 with no credit facilities. However if before you could buy that house with a 100,000 mortgage deposit before you now need to save up twice as long to be able to buy it.

So I guess as always it depends on the situation as to whether it's better or not. If you have a lot of cash in the bank you would be quids in though.

A 66% crash in real estate values, would throw this country into a massive depression just about every pension fund and bank would fold

Please do so, I have my eye set on a few houses I want.

[Page]

Well, my credit score dropped from 780 to 620 in two years. Why? I paid my bills on time, paid off my house, and took out zero loans.

Abolish it. This is insanity.

That's idiotic.

Here in Germany, one's credit score improves if you pay off your bills on time.

Yeah, it was hard for me to explain to my wife how credit works in America, that you don't get a perfect score by paying everything on time. Because the system is designed to favor such spending habits that you never default on your debts but that you are late enough to accumulate some interest, because that's how the credit card companies profit so that is what they want to encourage.

[Saiwania]

You don't have to carry any balance to build up a good credit score in the US. You just have to know how a FICO score is calculated and do your best to have the math check out.

Yes, this unfortunately usually means having more than one line of credit or juggling several accounts, but it works if you keep your credit utilization below 9%. Other stuff like length of credit history, you don't have as much control over- so it's not worth worrying about until later.

You don't want to close your older accounts if it'll effectively shorten your credit history and if you're not replacing it with a better or higher tier card. But you have to decide whether you want a card that has an annual fee or not in exchange for perks it is offering. Usually it's fine to opt for a regular card that has no perks or fee if you only care about the credit line it offers you.

[USS Monitor]

You don't have to carry any balance to build up a good credit score in the US. You just have to know how a FICO score is calculated and do your best to have the math check out.

Yes, this unfortunately usually means having more than one line of credit or juggling several accounts, but it works if you keep your credit utilization below 9%. Other stuff like length of credit history, you don't have as much control over- so it's not worth worrying about until later.

You don't want to close your older accounts if it'll effectively shorten your credit history and if you're not replacing it with a better or higher tier card. But you have to decide whether you want a card that has an annual fee or not in exchange for perks it is offering. Usually it's fine to opt for a regular card that has no perks or fee if you only care about the credit line it offers you.

Or you could stop letting Credit Karma or whoever goad you into giving such a shit.

[Ethel mermania]

You don't have to carry any balance to build up a good credit score in the US. You just have to know how a FICO score is calculated and do your best to have the math check out.

Yes, this unfortunately usually means having more than one line of credit or juggling several accounts, but it works if you keep your credit utilization below 9%. Other stuff like length of credit history, you don't have as much control over- so it's not worth worrying about until later.

You don't want to close your older accounts if it'll effectively shorten your credit history and if you're not replacing it with a better or higher tier card. But you have to decide whether you want a card that has an annual fee or not in exchange for perks it is offering. Usually it's fine to opt for a regular card that has no perks or fee if you only care about the credit line it offers you.

Or you could stop letting Credit Karma or whoever goad you into giving such a shit.

Its the difference between a 6% and a 0% loan on a new car

[USS Monitor]

Or you could stop letting Credit Karma or whoever goad you into giving such a shit.

Its the difference between a 6% and a 0% loan on a new car

It's time that you could be enjoying your life instead of stressing out. You only have so much time on this earth.

And your credit score will mostly take care of itself if you stay on top of your finances in other ways.

I hate borrowing money anyway.

[Free Algerstonia]

yes, under a marxist system, the world will be a paradise without any currency or payment tracking system whatsoever including the credit system. if you want to see an end to the credit system, begin adhering to the teachings of karl marx and embrace communist thought and the soviet union's great and positive legacy

Did you know that you can be a Marxist and criticize the Soviet Union? Not in your mindest, no. Apparently Orthodox Marxists, Eurocommunists, Centrist Marxists, Austromarxists, Reformist Marxists, and Marxist-Leninist-Maoists don't exist.

those are not true leftists, only anti-revisionist marxists are true leftists

[Ethel mermania]

Its the difference between a 6% and a 0% loan on a new car

It's time that you could be enjoying your life instead of stressing out. You only have so much time on this earth.

And your credit score will mostly take care of itself if you stay on top of your finances in other ways.

I hate borrowing money anyway.

I agree. I only do it for durable goods, Washer, dryer, computer, house, car.

[USS Monitor]

It's time that you could be enjoying your life instead of stressing out. You only have so much time on this earth.

And your credit score will mostly take care of itself if you stay on top of your finances in other ways.

I hate borrowing money anyway.

I agree. I only do it for durable goods, Washer, dryer, computer, house, car.

I bought my house and car cash down. This is how I wound up living in a rural economically depressed part of New York State, but it's OK. North Country people are human beings too.

I do use credit cards so I can shop online and I don't need to carry around giant bricks of cash when I pay for things like electronics or car repairs. And it's nice to have the option of financing things, even if I rarely do.

[Ethel mermania]

I agree. I only do it for durable goods, Washer, dryer, computer, house, car.

I bought my house and car cash down. This is how I wound up living in a rural economically depressed part of New York State, but it's OK. North Country people are human beings too.

I do use credit cards so I can shop online and I don't need to carry around giant bricks of cash when I pay for things like electronics or car repairs. And it's nice to have the option of financing things, even if I rarely do.

Its probably pretty up there.

[USS Monitor]

I bought my house and car cash down. This is how I wound up living in a rural economically depressed part of New York State, but it's OK. North Country people are human beings too.

I do use credit cards so I can shop online and I don't need to carry around giant bricks of cash when I pay for things like electronics or car repairs. And it's nice to have the option of financing things, even if I rarely do.

Its probably pretty up there.

Yeah, lots of trees and rivers.

I wasn't so thrilled when it was -30F, but now that it's warming up... pretty nice outside.

[Soveiniesberg]

So here's a unique topic of discussion, we have things all over the world like credit cards, social credit system of China (god don't even get me started on this) and so many other things tied to the word 'credit'. But let's focus on the credit system of America, which quite honestly, I say is similar in structure to the social credit system of China because without good credit, you're cut off from needed things such as loans, homes, anything you may need in life that's important.

Is it possible to abolish this, how would it be done and what would that look like? This thread is mainly for the American credit system, but any will do if we're being honest, especially China's because god is that hell

China's social credit system doesn't exist, what are you talking about?