Why Do We Have Credit Scores?
But like, actually. Why?
Have you heard the disturbing details of the “Social Credit System” in China? Companies work closely with the government to track your transactions and behavior. They use this information to assess your trustworthiness and rank you between 300 and 850. Low scores can prevent you from getting a house, a car, or even a job. And a bad score can follow you for your entire life.
Ah fuck, my bad. That’s the FICO credit rating we use in the United States. The Chinese score goes from 350 to 950.
The Chinese Social Credit System was started in 2009, tested in pilot cities for about a decade, then made national in recent years. Every once in a while, American news outlets run a story on it, clutching their pearls so hard the whole necklace breaks and comparing it to Black Mirror, Brazil, Minority Report, and other movies my mom won’t let me watch or else she has to wash my sheets. This thing is downright Orwellian, which means bad!
An NBC News report on the Social Credit System starts like this: “So, picture your life in a place where everything you do -- what you buy, how you behave -- is tracked.”
Let me tell you this: I would hate that. I would hate it if I were writing this on an Internet and GPS-enabled device with a camera pointed at me. And I would hate it if I constantly carried another tracking device in my pocket which has three cameras. And I would really hate it, I would just absolutely freak out and go nuts if the government used those devices to trawl every relationship, transaction, communication, and interest of mine to spy on me. How could you live in such a dystopic, paranoid, authoritarian, dare I say -- Orwellian -- place?
Later on, the narrator gives us the backstory: “China went from extreme poverty to economic giant pretty quickly. The credit history system didn't grow at the same pace, so people would default on loans and get away with it.”
Nooooooo! They defaulted on loans??? They should be in debtor’s prison, manacled to each other and eating thin gruel! We still do that with people who owe money in Arkansas, Louisiana, Michigan, Ohio, Tennessee, Washington, Texas, South Carolina, and Georgia, according to the ACLU. Why doesn’t China try that?
FICO was founded in 1956 as Fair, Isaac, and Company. Bill Fair and Earl Judson Isaac, mathematicians at the Stanford Research Institute (which I wrote about last year here), developed a system to assess someone’s creditworthiness, which they marketed and sold to lenders. The company went public in 1986 and launched its signature “FICO Score” in 1989. So, while it feels ubiquitous in America to worry about your credit score, it is only 32 years old. Most other major economies have far simpler ways of assessing credit that only track major defaults or non-payments.
With that in mind, here’s my stance on China’s Social Credit System: It’s not good that things like jaywalking, littering, and swearing are being tracked and tabulated to score people. It’s not good that these scores are being used to prevent people from traveling, to create permanent blacklists, and for public shaming. It’s bad that 1.4 billion people are being tracked by a massive, intelligent surveillance network. The Social Credit System is on Chazzy’s “Out” List for Summer 2021. The Social Credit System? Not Hot!
I also think that if FICO launched in 2021 instead of 1989, they would be including as much information as they possibly could: driving infractions, legal records, spending habits, and social media posts would all probably be fair game. I think they would still love to include that data if they could.
I think American credit scores are used in incredibly reckless and cruel ways. In April, Experian (one of three companies that collects credit score data) leaked the credit score and risk factors of nearly every American. For a long time, credit companies were telling individuals they had higher credit scores than they were reporting to lenders. People have had their lives ruined after credit companies mistook them for terrorists with the same name. Executives at TransUnion (another of the three) defended the use of credit scores in hiring, which happens frequently across the country. In other words, if you ever struggle to pay back a loan, you should be prevented from working for money to pay it back.
Credit scores entrench poverty. They turn us into numbers. If you mess up once, your credit score will make it difficult to put a roof over your head for years to come. They make our mistakes permanent. I think China’s Social Credit System is not an unprecedented dictatorial horror, but a worse iteration of our own shitty invention. And it’s naive, wishfully delusional, and probably Sinophobic to assume their surveillance state is any harsher than our own. The CCP will at least admit to watching you.
The most infuriating moment in the NBC report is when the narrator says, “What’s weird is so many people seem OK with it.” And I agree. It’s weird that we’re all just ok with this. It’s weird that we didn’t do anything when Snowden released his secrets, and we still didn’t do anything when Chelsea Manning or Reality Winner or Daniel Hale did it too. It’s weird that we let FICO decide if we can have a house and turn a profit doing that. It’s weird that we’re OK with the million small humiliations and invasions of privacy that have crept into our existence. But, hey. It’s a weird, weird world.