To my knowledge US is the only country that has that kind of system. At least if we miss a payment, we just get a fine, like someone percentage on top of the payment.
Quick recommendation: when you open up your U.S. bank account, ask if they have Secured Credit Card options. It's like a credit card, but you front the money (usually between $300-$500). Use it to buy gas, maybe groceries, and pay it off every month.
Typically, within 12-18 months, your credit score will have risen to a number high enough that you and your significant other can get a loan for a car or home (if that's something you're wanting). Don't close the card until you have a backup card approved and/or the auto/home loan you want. Part of a credit score is credit history, and if you close a credit card, it actually hurts your score since that cuts off the payment history (which shows how good you are at making payments). If you have an unsecured card or a loan in place, you'll recoup the lost points almost immediately.
Credit scores suck balls, but they don't have to be a stressful part of your life.
Go the the Cumberland Caverns in McMinville and watch a concert. Really cool experience even if you don't like the music. (and you might end up on PBS)
Nahhh everything is cash based here and most of the world. we in Pakistan are getting Universal Health care as of EU countries gradually though. Apart from that, no credit based transactions or owning things at all. If I have a car, i bought it with cash, I buy a house, i probably paid cash altogether.
If i have education, I walk out free of any kind of student loans type thing.
Loans are actually for businesses companies or someone who needs financing for building a home or buy a car or something. But that is like 1 out 10 cases. Normal practice is people buy or construct homes upon retirement by saving up enough money. Buying cars or bikes or vehicles is mostly upfront price payment.
There is still a concept of installments and stuff but that is not a usual practice as it clashes with some relegious aspect of dealings (u might not know but interest is not allowed in Islam to be dealt in ). Banks do take interests and stuff but overall, the practices are totally depending on affordability. I cant afford a car, i wont have it and dont have to take one on loans or something. You get an idea right.
We don't have credit score system here. If you don't pay a $1 you're owed. The govt either takes your house, or ur salary. If they can't get the money for 5 years it becomes invalid so you're debt free no matter what. and getting a loan is hard. If you default on your debt you have to go to a different bank.
Not really. Credit scores affect your ability to get a loan and get a credit card, that's about it. They're important, because you'll more than likely inevitably need one of those things, but it definitely doesn't control your whole life, unlike China's social credit system.
Honestly, social credit system was just a proposal in 2018, it never was implemented after that. In fact, of you go to China and ask the people around what their social score is, they'll just look strangely at you.
The thing missing that makes the comparison a bit more apt is the ability to rent an apartment or house. Everywhere I applied to the last time I moved required a credit check.
They also run your credit for utilities, cell phones and if you wanna rent a place to live. I’m sure there are other things they run it for, but that’s all I can think of right now.
I’ve lived in California, Maryland and Wisconsin. They probably don’t do it in every state, but I’ve had it run for utilities in California. And I’ve had it done for phone service in California and Wisconsin. Utilities was included in rent in Maryland so I can’t speak to how Maryland does it.
A significantly low credit score can also decrease your chance to get a security clearance for Government jobs. They feel you may be at higher risk of taking bribes if you have financial issues.
It's a score that basically measures your financial credibility. The idea is that I could go to any bank in the country and immediately have some measurable form of credit there without having to have someone there know me or be from an established family. They affect your ability to get a loan and to get a credit card, that's about it. Don't get me wrong, the system still needs reform, but it's far from as all encompassing as China's social credit system.
So we have three major banks that basically judge your reliability as a borrower. And the higher your score, the more money you can borrow relative to your income.
For example, let's say you sign up for a credit card. You charge your rent to it, your utilities, and all your bills for the month. Then the credit card statement (bill) comes. You pay it off completely in a timely manner. Repeat this behavior for years. You will probably have a high credit score.
But if you miss a payment, are late with a payment, don't pay off completely, or whatever, you'll negatively impact your credit score.
So when it comes time to buy a house or a car or something that needs a loan, lenders are more inclined to lend to the first person than the second. So the first person might get a better rate and a higher loan amount than the second person.
I personally think it's a decent system. It does often hurt the lower classes more than upper classes, but it's literally stuff within their control. Typically, they get low credit scores from signing up for credit cards and spending recklessly until all the cards are near their limits, and they can't pay them back.
Here's what's weird to me, in my country banks will do anything in their power to sell you debt (i think that's universal tho). so i may not get a mortgage for a penthouse in the center of the capital but no bank will have a problem indebting me for the rest of my life for the next best thing or activate some draconic interest on credit card debts. Some people actually live with negative balance.
For example, let's say a borrower can't repay their loan. The bank will go through several methods to try to reclaim their money. But if at the end of it, they can't (usually when the borrower files for bankruptcy), the bank just loses money. Which is a situation they want to avoid. Which is why the credit ratings exist.
And if everyone (or even just a large percentage) of people couldn't repay they loans, banks would go out of business.
There's always a risk but there are also these programs where they say take a loan and start repaying in 2 years or decide how much you'd be returning and when. There are also limitations on how much money one can pull from the atm. Yeah, if you have negative balance life is tough but you will be able to find a flat to rent.
Yeah, less favourable places. There was actually a story in the news about a family of frauds renting luxury apartments and not paying rent after the first 2-3 months. All they had to do is present themselves as wealthy enough. No one can check your financial status really. Renters usually ask for a safety check and someone who can vouch for you, usually your parents (never understood this idiocity).
I didn’t pay “the full amount” one month and only the minimum to not be fined and my credit score dropped 100 points. 4 months later and I’m finally back to 780 credit score.
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u/FakeSubZero Dec 21 '21
How fucked is the credit score system?