Why The American Credit System Is So Terrible

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In America, more than in any other country in the world, three numbers can change just about everything. From your job, to your home, to your insurance, three digits can command where you can live, what you can buy, and what it’ll cost you. To most Americans today, this is just “the way it is,” but that idea, and the idea behind credit scores in general, is deeply complicated, discriminatory, and rooted in a long history of our financial system driving an ever bigger wedge between the rich and the poor.

In this episode, we’re looking at credit scores. We’re going over everything wrong with our modern credit reporting system, how you might hear people defending this broken metric, and the why and the how that landed us here.

Why The American Credit System Is So Terrible – Second Thought
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Citations And Further Reading:
Credit Scores, Neoliberalism, and Class Systems
https://spire.sciencespo.fr/hdl:/2441/6cbt691h0h8o9q5rf0apko0pda/resources/2013-fourcade-classification-situations.pdf
https://books.google.com/books?id=zOreDwAAQBAJ&printsec=frontcover&source=gbs_atb&redir_esc=y#v=onepage&q&f=false
https://books.google.com/books?id=1SKWDwAAQBAJ&printsec=frontcover&hl=fr&source=gbs_atb#v=onepage&q&f=false
https://www.asanet.org/sites/default/files/savvy/sectionchs/documents/prasad.pdf

Credit Racism
https://apnews.com/article/lifestyle-technology-business-race-and-ethnicity-racial-injustice-b920d945a6a13db1e1aee44d91475205
https://medium.com/commonfuture/why-credit-scores-are-racist-da109fcfb300
https://www.forbes.com/advisor/credit-cards/from-inherent-racial-bias-to-incorrect-data-the-problems-with-current-credit-scoring-models/

Redlining and Market Logic
https://www.degruyter.com/document/doi/10.7208/9780226262772/html
https://www.youtube.com/watch?v=O5FBJyqfoLM

A Third of Americans Have Errors on Their Credit Report
https://www.cnbc.com/2021/06/11/how-to-fix-those-mistakes-on-your-credit-report.html

52% Credit Medical Debt Stat
https://www.consumerfinance.gov/about-us/blog/heres-how-medical-debt-hurts-your-credit-report/
https://www.commonwealthfund.org/publications/newsletter-article/survey-79-million-americans-have-problems-medical-bills-or-debt

Paying Off Loans Early Hurts Your Credit Score
https://www.nerdwallet.com/article/finance/paying-car-loan-help-credit-score

August 2001 Excerpt from “The Banker”
https://dro.dur.ac.uk/11323/1/11323.pdf

Short Description of Credit Unions
https://www.creditunion.ie/about-credit-unions/what-is-a-credit-union/

China Social Credit System
https://foreignpolicy.com/2018/11/16/chinas-orwellian-social-credit-score-isnt-real/
https://foreignpolicy.com/2021/09/15/china-social-credit-system-authoritarian/
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