this post was submitted on 16 Apr 2025
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Ok, so, telling lenders they cannot vet lenders is not reasonable.
Our critiques of credit scores does not automatically mean we want them abolished in favor the previous wink and a handshake.
But American credit scores don't measure your likelihood to pay back debts, they measure the likelihood of a lender to make money off of you. Those are nearly, but not quite, the same thing, and our current system, as the previous poster said, leads to a lifetime of debt obligations.
What we want is for life to not be dependant on debt.
Those are very different things.
The whole American credit system is frightening. You all but have to own a credit card (here they are only used by people travelling internationally), the credit card needs to be paid off manually (!?!? my bank just auto-withdraws the balance monthly), etc.
Here we employ a straightforward system to vet potential lenders : mortgages almost always have a contractual stipulation that you must use that bank to cash in your paychecks. Your bank will ask for proof of a stable income. You have to put down a downpayment. Defaulting on a mortgage furthermore puts you in a government registry; it's not "a wink and a handshake" as you put it, but a formal tightly-regulated process.
There is nothing that the credit score system does that the Belgian system doesn't achieve, except the part where it enables banks to prey on people through a privately owned and unregulated system used to push citizens towards short-term credit and needlessly dangerous financing habits. A 30 year-old with 50k€ in a savings account and no credit history sounds to me like someone who "should" get a mortgage a lot more than someone juggling 3 credit cards and a 10-year car loan. But the american credit system incentivizes the opposite. That is anarcho-capitalist predation.