TIL personal credit scores only started in 1989

It sucks but things were worse before, especially if you were black.

Or an immigrant. Or a woman (especially if you're pregnant). Or if you lived near black people or immigrants. Or if you had long hair. Or maybe the local bank manager just didn't like you. These were all acceptable reasons to deny your loan application prior to credit scores.
They literally made decisions based on things you can't control. Banks are now legally prohibited from even asking these things. If you notice, people working at a bank will never ask "where are you from?"
- Fuck I sound like a bootlicker but the net result was that it took away some control of the rich to influence social mobility.
  But rich people are living organisms and their think tanks are the smartest. They’ve already found ways around it.
Came here to say this. Credit scores are meant to remove some of the racial and social bias from the decision making. That was the idea anyway.
- Doesn't mean this is how it has to be. It can be improved further.
- Credit scores are meant to ~~remove~~ obfuscate some of the racial and social bias
Mass incarceration in the modern era makes that a hard comparison to square up.
Are you better off today as a middle class black suburbanite throwing a third of your paycheck at a subprime loan for a house you couldn't even legally own 40 years ago? Yeah, sure, I guess.
Are you better off today as a teenager in a Texas supermax prison without working A/C, working 12 hour shifts for less than a dollar an hour, while the state government frets that there aren't enough people like you to meet some arbitrary imprisonment quota? Doubtful.
Post-Reagan, society has been a decided mixed black for African Americans.

It's not like they didn't look through your financial history before then - they just didn't have to show their working publicly, which meant you could ne discriminated against for any number of things

So the same now, except now all personal data is located in one place according to the rules they set, from which they can sell your data and preemptively block you or refuse to meet you to discuss your practical repayment capability.
- All of those could be and were done before, only it wasn't public so you had no way to also know your score.
- You're not wrong - I was just pointing out it's always been that way. The rich never played fair, they played to win.
Do they show their work now, or just a score based on a bunch of non-public calculations?
- They don't provide the exact formula, but they will provide what influences the score and their record of those factors.
Plus before it was down to an individual, each of which had their own biased. While credit scores are all kinds of wrong, it does take the decision out of the hands of insividuals and makes it an objective, data driven decision

I tried to open a bank account at a credit union while homeless. Had $42k on my direct express card, finally on SSI, lump sum was for the previous year while unable to work.

No debts, never used a credit card. Couldn't open a bank account. Had to go thru a program that assigned me a fake credit card debt that I had to pay off for 6 months to get my credit score high enough.

Credit scores are a scam.

Sorry but that credit union sucks and you needed to move on. Credit unions should never deny someone an checking or savings account if they do not have a history of abuse.
Indeed. As evidenced by the fact that doing things that are money-smart (in general, stuff that amounts to avoiding debt) is actually harmful to a credit score. The powers that be want you to consume on borrowed funds.
It's depressing what happens when we give corporations the leeway to do whatever they want, isn't it?
This is my point, thank you for sharing your story.
If you are injured, not lucky or born into less fortunate circumstances, this credit system will stop you from taking control of your life.
The entire monetary system is a scam. Credit scores are just its demon offspring.
To be fair I wouldn’t loan money to a homeless person either.
- He wasn't getting a loan
- What they're describing is a pretty common financial product. They process a small unsecured loan which is placed straight into a escrow account with autopay so as far as the credit calculation goes they have a loan for which they are making consistent payments on until it's paid off. It's basically a hack to get some positive line items on the credit report to to try drag the score up a little

It’s our version of China’s social credit score.

Except we don't get the free housing and tuition, the cheap and efficient mass transit, or the retirement at age 55.
There's no such thing as "China's social credit score". All of thar came from small local projects and miss translating articles.
Edit: https://youtu.be/Kqov6F00KMc for the 10000 people whose just today are learning about it.
- Your social score has increased to: 🌟🌟🌟🌟
  Thank you for your continued support in defense of this system. Your alliegance has been noted.
- But what does Mr. Translating have to say about the situation?
- That is not true. I have had Chinese friends tell me that for example you cannot fly on a plane if your social score is too low.
- Are you sure it's 10,000? That sounds like a lot.
Not even close 🤣 what an absurd thing to say. You really think following social rules is the same thing as participating and having a financial history of posting back lent money is the same thing?
Edit you know what, never mind I see you all trying to compare imaginary insurance Facebook scenarios and pretending like that's how a FICO works. 👌👍.
- When I was younger, I was denied housing because I had no credit rating. Not a bad rating mind you, but no rating at all, because I did not use credit cards or anything else that would get me in Experian's system. I was penalized for never accruing debt. The system is absurd.
- In Europe this still doesn't even really exists. You just bring your proof of capital/value/timely payment stubs to the bank.
- Yes it's really the same thing. A basic number to reflect how good of a citizen you are. The metrics used are irrelevant

Credit scores didn’t exist but credit bureaus date back to the mid 1800s in the USA. Also, as others have mentioned creditors would do their due diligence and try to assert that you would be able to pay back your loans by doing many of the same things they do now.

This really isn’t some new, crazy concept like you’re making it out to be. The score has only simplified the process.

The score simplified the process for creditors of pre-assessing your risk as a debtor so that they don't have to put in the work to actually assess your rush a debtor, leading to an irresponsible and imbalanced credit system that you can't benefit from unless you are born on the right side of the tracks.
I didn't say the concept was new or crazy.
This is a way for operators of capital to accrue more capital and more easily distance themselves from everybody else, whose information they profit from, rather than creating opportunities.
I am not on our mortgage on the house that I own with my husband. I am employed, full time. At the time I had no debt, and the car loan was in my husband's name.
They told me I couldn't be on the mortgage because I had no credit score.
- that's how it works. you have no credit history you can't be trusted wiht a major loan like a mortgage.
  you need credit history.
Bank-internal credit scores existed since 1965 at Citibank... Then some Citibank employees formed their own company, FICO, to sell scores to banks without data or computing power to do so
creditors would do their due diligence and try to assert that you would be able to pay back your loans by doing many of the same things they do now.
In the Netherlands this would boil down to:
proof of employment (pay check and statement from your boss)
summary of outstanding debts
That's it. The BKR system only tells you any outstanding debts (such as a car or phone to pay off) or if you stil owe significant money to debtors. It doesn't tell you how long you've been a good citizen.

Back in the seventies/early eighties, I remember my grandmother getting financial privilege by showing the check numbers in her checkbook, which were in the high thousands.

If you ran around bouncing checks, you would get cut off long before that and have to start over at the dreaded check number 101.

Such simpler times.

ahhhh so thats why in the late 80s you could start your checks at 1000+
- Imagine someone handed you check #001 for $1000...would you really trust it?

Remember when there wasn't a proprietary algortithm giving everyone a social credit score and instead you had to get a letter from an existing member to signify your trustworthiness?

I dont like the proprietary nature of credit algos, but I'm not a fan of the letter system either

I prefer the occasional letter to the constant, invasive proprietary algorithm.
- Problem is when you move to a new country and can't open a bank account because you dont know anybody

Tbf personal credit cards have only been around since a couple decades before that.

But they primarily use credit scores to deny mortgages to people. Getting a CC with a bad credit score is very easy. The rates will just suck. And we've had mortgages, car loans and business loans a lot longer.
- Just wait till you learn what they used to deny people mortgages before the invention of credit scores.
Credit cards, but not credit. Home, auto, business, and other loans have existed long before that.
- And those loans were far more restrictive than modern day and usually more references and cosigners.

Correct. Credit scores are bullshit.

The idea is fine, but when they’re run by the credit bureaus, they’re subject to extreme corruption. Even if run by the government, as they should be, they’d be subject to extreme corruption.

Can you elaborate? And excluding all the bullshit with leaks, that's obviously an issue but I'm not sure it's related.

What will blow your mind is that there is now an insurance score that insurance companies use similar to a credit score.

What’s it used for? Determining how much you use the insurance you pay for? Any more info?
- https://www.insurance.com/insurance-score
- As far as I understand it, yes. It’s used to determine whether you’re insurance worthy and at what rates you will pay.
Probably a good thing. I have a relative who claimed in her homeowners insurance for all sorts of things, then just shopped companies when they raised rates. Definitely an abuser of the system.
Meanwhile I tried asking mine for guidance on when to make a claim and it sounded like “any time you want, then we’ll accept it or not and decide how much to raise your rates”, and I was warned by friend they may track questions like that to use against your claim or to raise rates before a claim. So if each, abuse all around

In Norway having loads of credit cards is negative for getting a house loan as it is potential debt that goes against your payment ability for the house loan.

Meaning we do have a credit score system for getting loans and more stuff on various credit solutions, but credit cards works against larger loans.

Which can be a pain in the ass when you want to buy a house/apartment and have credit cards that might deny you the last bit of money to win the bidding war...

That seems like a reasonable approach though, unless I'm missing something. If you need "loads of credit cards" then you're already but living within your means.
- I have loads of credit cards with only one or two that ever have a balance on them though...
- If you have a bunch of recently opened cards with like $500-$1000 credit limits, that's not great, but if you have several high limit cards that you are only using a small percentage of that limit, that is good.
Lol this is such a load of bs being taken at face value. No, having credit cards in Norway isn't bad. They judge your rating by your debt, and responsible credit card usage does not create debt. This reads like it's written by someone who doesn't understand how credit works, regardless of country.
- Not sure if you misunderstood the post. What they write is how it works in Norway. If you have two credit cards with 50k credit limit each, then that count as 100k debt when the bank calculates your ability to pay off a loan, it doesnt matter if you haven't used them.
- Maybe this explains further https://lemmy.world/comment/7822919
- I have to imagine credit ratings are fairly ubiquitous, since banking is international, and who's giving the money out? Would make no sense to penalize someone for having a lot of available credit. Maybe if you have 10 cards with low available credit, and they're all maxed out and you're just paying minimums, that's bad. That's bad in America too. Amount of available credit less amount of credit used seems to be a big factor.

I will just leave this here. Your employers can snitch on you as well and just give all of your paystubs to...Equifax. It was shocking to see which ones did and which ones did not.

https://employees.theworknumber.com/employee-data-freeze

The first time I saw this I was shocked. Every single paycheck of mine is there and there's basically nothing you can do about it without having negative credit impacts for having manually disabled it. Why on earth is this opt-out rather than opt-in? Then it wouldn't look like you're trying to hide something if you value your privacy at all.
It's crazy this is legal. So dystopian.
- I disabled that shit the moment I found out a few years ago. As far as I know it is only potentially an issue if a landlord or something wants to see it and isn't tied to your credit score. I don't give a shit right now anyways as my credit is good enough. If I need to give someone access to it, and it makes sense, sure, but I would rather hand over a copy of my W2 or paystubs personally.
  It is entirely messed up that it exists and most people don't even know about it. Dystopian nightmare indeed.
- Because the ruling class wants us to be controlled. Life's just peachy if you're rich.
So we have this massive quasi-public organization that gathers tons of personal data and then protects it with lousy security. Great.

The whole financial system is only about 50 years old

Credit scores have existed for decades, as the article states. It's specifically the FICO system that was started in 1989.

Yes, credit scores have existed for 150 years.
But the system of predetermining how deserving you are based on your race or other circumstances beyond your control centralized within a few firms making money off of that data? That's new and that's b*******.
- Did you mean bullshit? Are you 5?

1989? Blame Taylor Swift

...nineteen eighty-nine was a dream in a dream...
- Here is an alternative Piped link(s):
  nineteen eight-nine was a dream in a dream
  Piped is a privacy-respecting open-source alternative frontend to YouTube.
  I'm open-source; check me out at GitHub.

Wait until you hear about Dunn & Bradstreet and Moody's

FICO is kinda stupid in some ways but with responsibility it's not hard to get a decent rate/favorable score. Yes at the top end is dumb you need to open more credit but in practice that's not hard to do assuming you aren't just forced by circumstances to just live off credit.

It only takes one mistake to absolutely crater years of effort.
- It takes one pretty big fucking mistake to crater years of effort. I understand it does happen, usually around homes and employment, to which I would agree we need protections. It's not for small shit.
FICO and VantageScore aren’t even looked at when they do a full credit record pull when you apply for something. Reviewers look straight at your history directly and make decisions based on that. Scores are for laypeople to get a general idea of how their history might appear to a reviewer, but every lender has their own criteria.
- I believe they do use FICO but not necessarily the score itself. FICO has numerous models that can be used depending in the type of loan:
  There are different versions of the FICO Score. Over the years, FICO has released updated versions of its credit scoring models. FICO Score 8 is the most commonly used model, but there are more recent versions, including FICO Score 9 and UltraFICO. FICO also has several other credit score models designed for specific products, including scores specifically for credit card, auto and mortgage lending.
  https://www.lendingtree.com/credit-repair/what-is-a-fico-credit-score/
- Yup, and it becomes very apparent when you get into home loans vs credit lines. The verification goes way up since the last housing crisis.
That's a pretty big assumption.
And yes, you can manipulate this system, and everybody tells you how to do it, but I don't think it's something that anybody should have to do in a world where loans can be determined case by case rather than predetermined based on circumstances outside of your control.

They are new in the rest of the world. But we don't Need them. Thanks please.

I remember when I started my first job back in 2003 it was extremely rare to have someone pay with a credit card.

Huh, I worked a convenience store/gas station in the late 90s and credit cards were at least half of the sales. Heck, it was kind of funny when someone used a card for candy bar that cost less than a dollar.
- I worked at a movie theater and credit cards could only be to purchase tickets and not concessions so that may have had something to do with it
Where did you work? What kind of Boomer clients did you serve?
I worked fast food in '03, it was closer to 50/50.
- I worked retail in 2007 and almost never got anything but cash payments.
  And yes, most customers were boomer age.
Weird, about half of the sales during that time period for me were with plastic, but I lived in a city, so maybe that's the difference.
I did. I'm near 40 was about to enter college and credit and debit cards were everywhere. I've never handled much cash my entire life.

It's a silly system but really not that hard to do well. Put everything on credit card and set everything to auto pay the statement. That alone will give you good enough credit with little effort.

You forgot the most important part: never have an unexpected expense, like going to a hospital or your car breaking down.
- We got a new card, no interest for a year. Put our entire kitchen reno on it. Credit score went down 47 points altogether. Paid it all off, credit score went up 17 points. All of this inside 6 months. It doesn't make sense lol.
Yup, and pretend that your credit card is your debit card. I never pay for anything with my credit card unless I know that I can clear the balance immediately after if I had to.
The hard part for me is maintaining income.
Managing money is dead easy. Acquiring money is the problem.
“High functioning” autism. Kinda like a high functioning tricycle on the freeway.
- There's plenty of people not even on the spectrum unable to acquire enough money to get by, too.
  Remember you class solidarity: we're all fucked together!
Right, but in order to have "good credit" others must have "bad credit". There has to be a frame of reference to create a risk profile on a person. Capitalism is a zero sum game. If everyone is paying their bills on time and never missing payments and leveraging themselves responsibly, but you are $1 less leveraged than your neighbor, your neighbor will have a better credit score than you.
- the system is build primarily around whether you pay back your debt or not.
  if you have debt you can't pay... you have bad credit.
  good and bad credit have like 300 point spread. not 3. nobody cares if your score is 810 vs 812.

So we invented social score just before the 90s, and everyone just shrugged and said okay. I guess that's cool. But we freaked out when china did the same thing a decade or two later, not realizing we've had it the whole time.

Chinese social credit can be deducted for associating with people who shares opinions the state disapproves of. Thereby weaponizing social ostricism for control.
- So can credit, and especially the lesser talked about insurance scores.
This is a good point, although you can still legally buy plane tickets and attend public events or go to school regardless of your or your family's credit score in the states, which is not possible in China
- Yeah, theirs is more intense, I agree. But we definitely have one. It's your good little capitalist score, and if you don't have a good score you can end up homeless bcz nobody will rent to you or sell you a house.

comma splices are neat; but have you heard of other punctuation?
credit scores are a neat way to make a game out of blaming regular people for the continued collapse and bail-out of wall street and banks.

You have a but there.
Aren’t you supposed to exclude those when using a semicolon instead of a comma?
Clearly I should take advice from the pedantic grammar fanatic, your people are universally admired, and appreciated.