Where this becomes "bad for society" is when the customer _has to_ take on debt for the sole purpose of building a credit score. Some of us would prefer not to utilize debt at all, but if we want to (for example) rent an apartment we may be _required_ to have a credit score. Even if we offer to pay the full term's rent up front. Source: Experience.

You're assuming that "take on debt" means literally taking on debt that you don't pay back quickly. Building credit doesn't require actually going into debt; you just need to have a credit limit available to you, that you don't abuse. Absolutely nobody "_has to_ take on debt for the sole purpose of building a credit score", as you put it. Someone building credit should only use credit that they can pay off immediately. You don't "go into debt"; rather, you funnel/proxy money you already have through a creditor.

Building credit means you could put yourself thousands of dollars in debt... but you don't. 90% of building credit is demonstrating restraint NOT to use credit dangled in front of you. In the rare instance where you take advantage of the ability to use more credit than usual, you pay it off within a reasonable amount of time. The credit industry is predatory, to be sure. But that's only for the idiots who believe they're "able to" or "expected to" use all the credit afforded to them. It's about seeing all that possible "green" in front of you and NOT using it, or using it sparingly and responsibly.

>> Some of us would prefer not to utilize debt at all

So don't. Build your credit by buying groceries on a credit card, and paying it off every month. You're not really going into debt; you're just postponing paying your groceries by a week or two. You can build a near-perfect credit score without ever paying a single cent of interest.

> You're assuming that "take on debt" means literally taking on debt that you don't pay back quickly.

No, I'm saying I don't want to have anything to "pay back" to anyone. _You_ are free to live differently, I just want the option to complete my transaction at the time and move on. Yes, paying back debts on time prevents bad outcomes, but so does not taking on the debt in the first place. And objectively it's a much more rock solid way of making sure your finances don't get out of whack. I've never met anyone who says "I'm bad with debt," but yet many American's have suffered bad consequences from debt.

> you funnel/proxy money you already have through a creditor

A service I don't want, get no value from, and increases the cost of the goods I consume because they aren't offering it for free.

> Building credit means you could put yourself thousands of dollars in debt... but you don't.

Not quite, you could actually be carrying debt you aren't able to pay back, but are able to make payments on. In fact - it's in the credit industry's best interest for you take out lots of loans that you _can't pay back_ but _can_ make payments on because the (often massive) interest is the money maker. Soon you'll have paid more in payments than you were actually lent. This has gotten so bad the government has had to get involved multiple times. I'm worried that credit scores are tools to create that situation, because of this alignment (think it about like this - are you the customer/priority? or is it the lenders?). Sort of like casinos wanting you to think you're "up" or close to a big score when in reality you're in the red. (And don't get me started on the opaqueness of the systems, lack of recourse for errors, and oh yeah - the security negligence that leads to large scale losses of sensitive data...)

> "You're not _really_ going into debt;"

Aw come on, if you have to put "really" in italics you already know I'm not gonna buy it. :-)

I get that I can have a good credit score, I get that lots of people don't mind having one. To each their own. I'm just annoyed that I can't opt out. That "not having a credit score" is increasingly not a choice I can make, nor can my children.

There are certain transactions that don’t begin and end with the payment of the cost of the service. When renting an apartment, you are able to cause far more damage to the apartment than the rent you pay, hence the apartment owner has an incentive to also consider what kind of person they are renting an apartment to.

A credit check serves as a proxy for someone who cares about their future reputation and hence is less likely to cause damage to an apartment, and if they do, then they will pay for it. Similar reasoning applies to other rental businesses such as hotels, cars, tools, equipment, etc.

To be clear - I 100% understand why people who want to do credit checks like credit scores. It's not that they have no value, it's that they have too many down sides and it bothers me that it's increasingly difficult to "opt out."

Well, what are you supposed to do if you would fail the credit check (but pass the identity check)?

Live nowhere?

Because if you won't pass the credit check for one property agency, you won't pass for any of them.

I've been in that situation. I had to pay 14 months rent up front. Crazy thing is I had the money and could pay it fine, but I couldn't pass a credit check to pay exactly the same amount monthly.

Actually the crazier thing is they required 12 months rent up front again, for the second year. You'd think by then I'd have a track record of paying rent.

All because paying rent for many years does not count towards credit rating, even though it's highly regular and the single largest outgoing for most people. (Paying mortgage does count. Annoying.)

I have an hard time understanding your point.

Sure I agree that paying rent should count towards credit rating, but that's not an argument against credit rating.

A bad credit rating means that it's a bad idea giving you a unsecured loan... that's all. An apartment is sadly pretty close to a loan, even more so with all the renter protection you get out of it.

Paying the full rent in theses cases make sense then.

My point is that in the lostphilosopher case, it was maybe simply used as an identity check, making sure it wasn't from a criminal. The resulting credit score wouldn't matter because of the full rent.

> You'd think by then I'd have a track record of paying rent.

Well, if they feel safer that way, again make sense. Why won't you personally give me a loan? The same apply to that case.

> An apartment is sadly pretty close to a loan, even more so with all the renter protection you get out of it.

A place to live is also a basic life necessity.

Something is very wrong in a society where a "bad credit rating", which can arise from many things (some of them having nothing to do with credit - agency malpractice comes to mind), threatens homelessness _even when you can afford to rent_.

I am very surprised that they allowed you to pay rent up front. This creates a huge liability for them because at least in the United States it becomes almost impossible to evict you.

I did the credit check - I didn't have a credit score, because I didn't want one. I had existing rental history, a drivers license, and W2s (all also required for the application). I don't think my identity was in question, but maybe it was? Regardless I rented at another place that didn't require a score, it all worked out.

Seems like most rental properties don’t report payments to the credit bureaus. The service my current landlord uses for online payments has an option to report payments to TransUnion. As far as failure to pay rent, I guess one’s judgements in housing court would come up in the background check.

Then I agree completely, it was pretty shitty of them and I don't understands at all their reasoning.

"good debt" credit used to buy productive goods (ie stuff that brings money in) that you could not afford otherwise, these are extremely rare if you are not a company, hence you can't really "build a credit" on "good debt".