diego.blogger.de

In NYC I was surprised that in the US there are at least three companies which keep track of every person's credit score who has a social security number. For example, in general, a credit report is needed when one wants to rent an apartment, but also in many other situations. There are funny things going on related to this credit score which is a value between 0 and 1000. First of all, it is not public how it is calculated. The agencies just do it and all of them provide slightly different values, but one does not know how it is done. In particular, it is strange that having a debt increases the score, as long as one pays the rates. This also is partly cause of the current credit crisis. One important remark is that one should check the credit report just to make sure that nobody stole ones identity, such as by using a credit card on ones name (identity theft).
However, one major point of my criticism is, that all this information involved is very personal and critical. Accordingly, it should not be managed by any company but rather by a governmental institution.
Ignorant as I am, I was somewhat surprised, that in Germany there is basically the same system. Here is one company (Schufa) that keeps track of the creditworthiness of each person. The idea is that banks, before opening an account, can make sure that the account holder does not have large debt with other banks. I also had to experience, that in order to rent an apartment, the landlords in Berlin as well ask for a credit report among other documents – a habit that I did not know from where I was living before.