The Tyranny of Credit Ratings

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Margaret Thatcher was right. The company does not exist, or at least there is no longer. More and more, there is only “the economy”.

As this ridiculous abstraction continues to subsume more and more areas of life – the family, the state, even the Church – which until then had only enjoyed a tertiary link with modern commerce, it becomes more and more necessary to have recourse to metaphors drawn from biology, from the science of life, to describe it. The most appropriate images tend to be taken from the animal kingdom. Walmart, for example, which quietly appears in cities across rural America before suddenly withdrawing from a community, killing it in the process, is like the parasitic worm Onchocerca volvulus spread by black fly bites. For years and years, the host lives in the dark that the nematodes multiply throughout their body until they die or suddenly disappear. The victim remains blind, often with his immune system devastated. No vaccine exists.

I cannot think of any such adequate zoological illustration of the role that credit ratings play in contemporary America. They suggest characteristics of various parasitic organisms. Truly, the FICO score is like the gigantic honey mushroom, the world’s largest living creature, stretching over two miles through the Blue Mountains of Oregon. Largely invisible but ubiquitous, older than civilization itself, beloved by many foodies, who insist that its yellow-brown mushrooms are a delicious component of some pasta dishes, it smothers trees, flowers and many more ‘other nice things before you kill them.

A credit score is not a trivial tool for assessing risk. It is a monstrous intrusion into the life of every living American. Credit scores are used not only by businesses deciding what shade of silver plastic they’ll be happy to mail you or by banks deciding how much interest they’ll charge you on your home loan – or if you are even worthy of the privilege of being charged interest. They are also used by employers, including the federal government and various state governments, in the hiring process. Without a decent credit score, it is very difficult if not impossible to rent an apartment or a house, to get electricity, water or heating in your residence without having to pay a massive deposit, to buy or rent a vehicle, or even enter a cell phone. Contract. They are the primary means by which companies like Geico determine prices, even in states where the purchase of auto insurance is mandated by law.

Millions of upper-middle-class Americans never think about their credit rating. (Others make them the most important consideration in their choice of romantic partners.) When they were in college, they received their first credit cards in their name, the balances of which were paid by their parents. Mum and dad probably paid their rent on time too, or at least made sure there was enough money there. They can’t imagine a world in which getting credit checked is anything more than a meaningless formality, like going through a metal detector before entering a concert.

Why do people end up with bad credit scores? This is in many ways the most sinister thing of all. Those who need cash the most are most likely to be denied it, except by loan sharks, legal or otherwise. This often happens because they are operated by unscrupulous medical clinics or health insurers or both. They are overcharged for a service and send an invoice that, for one reason or another, they are unable to dispute on time. It remains unpaid and goes to collections. Stubborn people, or even anyone with a sense of honor, will plead in vain as their numbers drop from 600 to 500 to 400.

Those with bad credit often fall prey to the creditors themselves, who dangle in the eyes of 20-year-olds that the California government does not consider old enough to buy tobacco to have the dazzling opportunity to access an unlimited range. of consumer goods via a high interest card with a line of $ 1,000. They buy clothes or take a little vacation. They enjoy life as it is. Then they realize that they are overwhelmed and that it is too late. They are delinquents. Error feeds on error. The attempt to get a student loan out of default makes it impossible to pay the Internet bill on time, service is interrupted, and it becomes impossible to apply for a job. With years of patience, their scores can recover as they mature and give up on themselves. But life in the meantime will be very difficult.

What is left for the person without good credit? A parallel universe exists for them alongside the economy inhabited by the rest of us. It’s a world of uncertainty, of shady vehicles paid for in cash, of an approach to driving with a gun that involves never being stopped for any reason by a police officer even if it means getting a ticket for speeding in the mail later to stay in apartments with bad heat, bad plumbing, mice, cockroaches, termites because it is better to be refused by a more honest landlord. Americans without adequate credit often do not have bank accounts. This means that they cannot receive paychecks by direct deposit or pay bills. Instead, they use “gift” or prepaid VISA cards and get month-to-month wireless service through Walmart. Even their tax refunds are affected by temporary payment card companies that demand minimum balances and service charges; often, these end up with an unreachable dollar or two that are swallowed up without the owner’s knowledge.

Meaningful participation in the economy requires good credit. In a country where the economy has replaced society, that means our credit rating system is an obstacle to life.

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