The tyranny of credit scores

Margaret Thatcher was right. There is no such thing as society, or at least there isn't anymore. Increasingly there is only "the economy."

As that ridiculous abstraction continues to subsume more and more areas of life — the family, the state, even the Church — that had hitherto enjoyed only a tertiary connection with modern commerce, it becomes more necessary to turn to metaphors drawn from biology, the science of life, in order to describe it. The most appropriate images tend to be drawn from the animal kingdom. Walmart, for example, which appears unobtrusively in the towns of rural America before suddenly removing itself from a community, killing it in the process, is like the parasitic worm Onchocerca volvulus spread by the bites of black flies. For years and years the host lives on in ignorance of the fact that nematodes are multiplying throughout his or her body until suddenly they are dead or gone. The victim is left blind, often with his immune system devastated. No vaccine exists.

I can think of no similarly adequate zoological illustration of the role played by credit scores in contemporary America. They suggest features of various parasitic organisms. Really the FICO score is like the gigantic honey fungus, the world's largest living creature, which spans more than two miles across the Blue Mountains of Oregon. Largely unseen but ubiquitous, older than civilization itself, beloved of many gourmets, who insist that its yellow-brown mushrooms are a delicious component of certain pasta dishes, it chokes trees, flowers, and many other lovely things before it kills them.

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A credit score is not an anodyne tool for assessing risk. It's a monstrous intrusion into the lives of every living American. Credit scores are used not only by companies deciding which shade of silver plastic they will be happy to send you in the mail or by banks deciding how much interest they will charge you on your home loan — or whether you are even worthy of the privilege of being charged interest. They're also used by employers, including the federal and various state governments, in the process of hiring. Without a decent credit score it's very difficult or even impossible to rent an apartment or a house, to get electricity or water or heat in one's residence without having to pay a massive deposit, to purchase or to lease a vehicle, even to enter a cellular contract. They are the primary means by which companies such as Geico determine prices even in states where the purchase of automobile insurance is mandated by law.

Millions of upper-middle-class Americans never think about their credit scores. (Others make them the most important consideration in their choice of romantic partners.) When they were in college they received their first credit cards in their own names, the balances of which were paid off by their parents. Mom and Dad probably paid their rent on time as well, or at least ensured that there was enough money there. They cannot imagine a world in which having one's credit check is anything but a meaningless formality, like stepping through a metal detector before entering a concert.

Why do people end up with bad credit scores? This is in many ways the most sinister thing of all. Those who stand most in need of liquidity are most likely to be denied it except by loan sharks, legal and otherwise. It frequently happens because they are exploited by unscrupulous medical clinics or health insurers or both. They are overcharged for a service and sent a bill that, for one reason or another, they find themselves unable to dispute in a timely manner. It remains unpaid and goes to collections. Stubborn people, indeed anyone with a sense of honor, will plead in vain as their numbers drop from 600 to 500 to 400.

Those with bad credit are frequently preyed upon by creditors themselves, who dangle before the eyes of 20-year-olds whom the government of California does not consider old enough to purchase tobacco the glittering possibility of access to an unlimited array of consumer goods via a high-interest card with a $1,000 line. They buy clothing or take a small vacation. They enjoy life, such as it is. Then they realize that they are in over their heads, and it's too late. They are delinquent. Mistake feeds upon mistake. The attempt to bring a student loan out of default makes it impossible to pay the internet bill on time, service is terminated, and it becomes impossible to apply for a job. With years of patience their scores may recover as they become more mature and self-denying. But life in the meantime will be very difficult.

What is left to the person without good credit? A parallel universe exists for them alongside the economy inhabited by the rest of us. Theirs is a world of uncertainty, of dodgy vehicles paid for in cash, of the run-and-gun approach to driving that involves never for any reason being stopped by a police officer even if it means getting a speeding ticket in the mail later, of staying in apartments with bad heat, bad plumbing, mice, roaches, termites because it is preferable to being turned down by a more upstanding landlord. Americans without adequate credit frequently have no bank accounts. This means that they cannot receive paychecks by direct deposit or pay bills. They use VISA "gift" or prepaid cards instead and enjoy wireless service on a month-to-month basis courtesy of Walmart. Even their tax refunds are appropriated from them by temporary cash card firms that require minimum balances and service charges; often these are left with an inaccessible dollar or two that is swallowed up without the owner's knowledge.

Meaningful participation in the economy requires good credit. In a country in which the economy has replaced society, this means our system of credit scoring is an obstacle to life.