I remember once I knew a German visiting Texas. He was staying with a college buddy. The German had tried calling long distance inside the US but didn’t know you had to dial 1 first. This seemed to discombobulate him no end. Complained that this was not explained in phone directories, but I recall such instructions being included. Not sure if this would even be an issue nowadays, I’m so out of touch wit the phone system in the US.
The same German was also shocked you couldn’t just cut across people’s land without fear of getting your ass shot off for trespassing.
I don’t like it, either. I think the idea is that a credit score gives an indication of how responsible a person is. One problem is that, by allowing credit scores to be used this way, it creates a situation where people who are in a hole can’t climb out of it. People who are in debt need to work their way out of it, but using the credit score this way keeps such people from getting well-paying jobs.
As for insurance, it could be that credit scores correlate with risk - that people who have low credit ratings are more likely to get into accidents, or are more likely to get sick. Again, using credit scores this way makes it harder for people who are in debt to get out of debt.
I’ve got a mortgage, but whether I qualified for it was a matter of
any listings in the national list of ‘people who don’t pay debts’? No
salary paid to this bank? Yes
how long has had account with us? several years
has ever tried to spend more than available? no (no overdraft fees, most banks here simply do not allow overdrawing)
how much down? 20%
according to our calculations, can pay amount requested in a timely fashion assuming current income level remains stable? hell yeah
agrees to sign insurance policy that will pay off any leftover mortgage upon decease or permanent incapacitation? yes
Result: mortgage granted, interbank rate - 0.25%
For a different bank, the questions were different, I qualified on all counts except for one which made it impossible to grant me the mortgage: I had not held my current job for more than 3 years, something that hadn’t even come up in the first bank (given the situation of the national market at the time, that one counted as a bitter joke). Each bank calculated its own score.
Note that here the assumption is that someone without a credit history but with income is a null risk: if you’ve never asked for a credit it’s because you’ve never needed one. In the US it’s viewed as a large risk.
In fairness, I can see it if the applied-for position is such that somebody heavily in debt, and with a bad credit rating, could be tempted to perpetrate fraud. Such positions could include accountants, bookkeepers, cashiers, and other positions involving trust over funds that do not belong to the person performing the job. A person with a bad credit rating could become a moral hazard, in other words.
That being said, however, there are many positions that do not involve direct control over others’ money. In such instances, I agree with you, kambuckta; there is no need to ask for a credit score. In some jurisdictions (mine, for example), asking for an applicant’s credit score, when the applicant is applying for a position not involving control over money, is illegal.
Agreed. I made several trips to Moscow, Russia and socialized with a lot of people in very different age groups. Whether they were younger, my age, or older - they all were adamant that you just don’t drink and drive - period.
That’s not to say no one does but I found their attitudes towards drinking and driving to be far more strict than attitudes here in the U.S.
As it should be. But what possible enforcement mechanism could there be? How can you prevent a business from simply running a credit check on an applicant without telling him or her?
I wonder whether somebody heavily in debt is more likely to commit fraud. Stealing from an employer with all the checks, balances and security cameras in play nowadays seems to be a really difficult task for your average Joe. Certainly, the fraud cases that come to the media’s attention here* are mostly quite rich folks already with the skill and resources needed to ‘get away with it’…stealing money from other people is their ‘occupation’ you might say and not necessarily driven by need (take gambling debts out of the equation, I’m sure they don’t show up on a credit score).
At the same time, if I was looking to hire an accountant or bookkeeper with a lousy credit-rating, I’d do a double-take. How could they manage MY finances if their own are in such a state!
*Yes, I know that I am referring to cases that get publicised which are more likely to be high profile embezzlements than Sharlene down at the supermarket nicking $20 out of the till. Are there any figures available which break down employment-based fraud cases by socio-economic class?
And don’t forget, I can get a bad score for being late with a $100 electricity bill: if I owe hundreds of* thousands* of dollars (or millions in some instances) my name will never grace the B list. If you’re rich enough, debt doesn’t matter.
Thanks for the heads up Johnny L.A. I visited LA last week and had a taco and burrito from here based on your advice. I know how much you rave about this place. Yum!! Thanks. Back in Sydney now, where Mexican food is rare, unfortunately. One of the things I liked about the USA was the preponderance of delicious mexican food. Over here is good quality asian food.
