how come towns and villages existed for tens of thousands of years with no credit scores?
They did. Even before money was a thing, there was an unofficial tally kept by members of a community as to who contributed and who didn’t. Non-contributing members would lose social status and potentially access to the community’s resources.
You don’t need one when there’s only like a hundred to a thousand people in a village. But when you have literally billions of people across the globe, you’re gonna need a more sophisticated way to measure people’s credibility.
Why would a system for tracking someone’s historical reliability in lending, and then paying back, money be an anomaly? I mean I get the general sense of distaste in being boiled down to a number by financial institutions, but what I don’t get is why anyone seems confused about how or why credit scores exists (other than that it makes for a nice hot take on Twitter)
In what world would something like a credit score NOT exist, given that a) you have a customer base larger than a couple hundred individuals, and b) you have a technology that allows you to calculate a risk/reward index on those individuals?
Countless hours have been poured into algorithms to rate things like movies on an easy to digest point system, when the stakes are as low as 2 hours of your time and 15 bucks. OF COURSE there is going to exist a system for communicating the risk of extending a lease or car loan or mortgage to individuals.
The problem is, it doesn’t really measure the risk of lending, it measures the profitability of lending. And it results in people who probably shouldn’t be loaned money being taken advantage of by corporations.
how come towns and villages existed for tens of thousands of years with no credit scores?
They did have them, just under a different name/implementation.
But the concept of collective trust is pretty core to any herd animal.
Modern credit scores mostly just differ in the fact you can obtain that info lightning fast, instead of by having to write a letter and waiting several weeks for the response on “can we trust this person’s claims? Can you vouch for them?”
fishermen / traders would have accounts at local shops allowing their families to have things while they were away at sea for months or even years at a time, and pay them back when they returned.
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They did. Even before money was a thing, there was an unofficial tally kept by members of a community as to who contributed and who didn’t. Non-contributing members would lose social status and potentially access to the community’s resources.
See David Graeber’s “Debt: The First 5000 Years.”
You don’t need one when there’s only like a hundred to a thousand people in a village. But when you have literally billions of people across the globe, you’re gonna need a more sophisticated way to measure people’s credibility.
Why would a system for tracking someone’s historical reliability in lending, and then paying back, money be an anomaly? I mean I get the general sense of distaste in being boiled down to a number by financial institutions, but what I don’t get is why anyone seems confused about how or why credit scores exists (other than that it makes for a nice hot take on Twitter)
In what world would something like a credit score NOT exist, given that a) you have a customer base larger than a couple hundred individuals, and b) you have a technology that allows you to calculate a risk/reward index on those individuals?
Countless hours have been poured into algorithms to rate things like movies on an easy to digest point system, when the stakes are as low as 2 hours of your time and 15 bucks. OF COURSE there is going to exist a system for communicating the risk of extending a lease or car loan or mortgage to individuals.
The problem is, it doesn’t really measure the risk of lending, it measures the profitability of lending. And it results in people who probably shouldn’t be loaned money being taken advantage of by corporations.
They did have them, just under a different name/implementation.
But the concept of collective trust is pretty core to any herd animal.
Modern credit scores mostly just differ in the fact you can obtain that info lightning fast, instead of by having to write a letter and waiting several weeks for the response on “can we trust this person’s claims? Can you vouch for them?”
fishermen / traders would have accounts at local shops allowing their families to have things while they were away at sea for months or even years at a time, and pay them back when they returned.