I always assumed credit scores were an integral and historic part of the American financial system.
They were not, they are very recent，most of your parents didn’t have credit scores growing up, and as you can probably tell or at least intuit, it’s mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.
Or an immigrant. Or a woman (especially if you’re pregnant). Or if you lived near black people or immigrants. Or if you had long hair. Or maybe the local bank manager just didn’t like you. These were all acceptable reasons to deny your loan application prior to credit scores.
They literally made decisions based on things you can’t control. Banks are now legally prohibited from even asking these things. If you notice, people working at a bank will never ask “where are you from?”
Fuck I sound like a bootlicker but the net result was that it took away some control of the rich to influence social mobility.
But rich people are living organisms and their think tanks are the smartest. They’ve already found ways around it.
As time moves on, a lot of things containing racial bias have gotten more abstract. For example, we don’t segregate schools by law anymore, but African-Americans do tend to live in neighborhoods together, those neighborhoods tend to have lower property values, and schools are funded by the taxes on property values. Segregation is still there, but you have to go a few layers deep to find it.
However, as its been forced to get more abstract, it’s also become less effective. Without absolute prohibitions against African-Americans attending the same schools as white people, there has been more upwards mobility of African-Americans to live in better neighborhoods with better schools and end cycles of poverty. Still, it would be better if we got rid of this dumb property tax system for schools altogether.
Credit scores are the same. It abstracted away the racism. It’s still there, causing unnecessary hardship, but not to the degree previous systems did. There is more room for upwards mobility, but that doesn’t mean we should leave it as it is.