I moved from Canada to California for a new job with a mid six figure salary.
I had a very difficult time finding a place to rent as I had no credit score. Only places that were available without credit score was a room to share. That was not an option with a cat, wife and kids.
Finally, I found a place that was willing to accept the entire year's rent up front. Moving such a large amount of money from Canada to US had its own set of hurdles.
Once that was sorted out, I had to deal with yet more craziness to buy a vehicle. I decided to buy a CPO Mazda from the dealer in cash (using a cheque, of course). Once I signed all the papers, they ran a credit check on my newly created SSN. The system could not find my SSN. So, they denied letting me buy the car because they couldn't accept such a large amount from a person they could not verify. My passport and Canadian driver's license were not acceptable proof of ID for the dealer.
On the flip side, my long history with Amex in Canada was ported over. So, they quickly set me up with very high limit credit cards.
We already live in social credit but I fear the ones maintained by companies might be better for the consumer.
This exact same story pretty much happened to me when I moved to Canada about 15 years ago. I wasn't able to get a credit card for years, and couldn't rent an apartment without a guarantor, despite the fact that I was full-time employed in the tech industry, had zero debt, plenty of savings etc.
What I took from the experience (especially after going through various iterations of it in several other countries) is that most communities are biased against migrants/newcomers. Egalitarianism would be nice, but in practice nepotism and chauvinism are encoded in policy.
Maybe this is why Europe is so popular with migrants? I've lived in four European countries and never had anything like that. To rent a place you just need to pay 1 or 2 months deposit up front. I've never heard of anyone being denied to buy a car with cash (but we don't use cheques... the payment is either successful or not - it doesn't need to clear).
Loans are a different story, it varies a lot - but in my country for example, after working 6 months in a full-time job you can get a mortgage without issues. All they care about is how much you are earning, and that you don't have any other debts so that you couldn't afford the repayments.
IIRC some countries, like UK, have a similar thing like Credit Score, mostly used for what type of loans they can give you, max credit card limits, and other financial products, but won't affect at all to buy a car in cash or renting an apartment.
For me it's crazy not being able to rent a place even paying a whole year beforehand.
It’s not a bias against immigrants, it’s a bias against the unknown.
I’ve had an identical experience as an 19 year old college dropout trying to rent an apartment and buy a car with no established credit history. It at least 5 years to qualify for my first unsecured card with $1,000 credit on a 6-figure salary. I could not qualify for any vehicle, not even a used cheap Honda Civic with my lack of history, and I had to play the Craigslist rental game for years as well.
There's a small difference... at 19, you truly didn't have a credit history. A middle-aged immigrant from Canada likely has a credit history, but for some reason, it's not portable across arbitrary boundaries. Canada-US is a pretty solid example... We're neighbors, we both have stable economies, modern banking, etc. From a consumer's perspective, there's no good reason a credit history shouldn't carry across that border.
> for some reason, it's not portable across arbitrary boundaries
The reason being that you can't be held accountable across borders. I may have good credit in Canada, but my German landlord can't sue me there if I fall behind on rent.
That's assuming a person's creditworthiness and trustworthiness changes as they cross a border. I tend to doubt that happens.
Your credit score IS maintained by companies! Their whole business is maintaining American credit scores. I really have no idea what their business model is.
Yes, the only role of the government was to issue an SSN which has been explicitly said shouldn't be used in such a manner[1].
It is a real pet peeve of mine that people take such hard stands on issues like this when it's so easy to check what's actually happening first. This thread isn't the most egregious example, but it is an example of someone just imagining a system with a big flaw and then suggesting a solution to the problem they made up.
[1]: https://www.scientificamerican.com/article/social-security-n...
Near instantaneous credit checks is their business model, and they operate worldwide.
Their business replies on collecting and storing vast troves of data that influence your credit score.
Were the likes of Experian and Equifax taken out of the credit system, you would see a massive credit crunch as every business that relies on them would have to manually verify anyone's credit score (which could introduce a whole new set of biases) or forego that completely.
Interestingly, when it comes to business credit checks, i.e. Financial viability and director background checks and history - this is something an LLM could very easily find red flags from publicly accessible data before forking out money for a full report.
What do you mean they operate worldwide? There are many countries that operate without credit scores.
The credit score provided by someone like Equifax is just a number - cheap and quickly requested via an API. And yes, bureaus don't have operations in every country - but my point was that credit scores don't just exist in the US.
Take the Netherlands, they don't use scores; rather you would request a report that details any known factors that influence creditworthiness.
The difference is: - the score is a simple weighting (0-1000) that is systematically calculated by the bureau. - Without a score provided, you have to make a judgment yourself on that individual's creditworthiness from their report.
Data and access to said data is their business model
I'm sure that running credit checks costs money somehow. Accurate credit information facilitates profitable loans.
On paper, credit scores are supposed to measure financial reliability, but in practice they’re more like an arbitrary gatekeeping mechanism
Are credit scores transnational?
>Once that was sorted out, I had to deal with yet more craziness to buy a vehicle. I decided to buy a CPO Mazda from the dealer in cash (using a cheque, of course). Once I signed all the papers, they ran a credit check on my newly created SSN. The system could not find my SSN. So, they denied letting me buy the car because they couldn't accept such a large amount from a person they could not verify. My passport and Canadian driver's license were not acceptable proof of ID for the dealer.
Go to another dealer, I have bought cars with a personal check without having a credit check at all. I think that's a really unusual policy.
It's more complicated than that. If the transaction is over $10,000 it needs to be reported to the IRS. Dealers are often involved on the financing side directly, and their systems are just set up to require a Social Security number to put anything into the system. So because of the financing, some of these "know your customer" rules apply, and they automatically get applied to everyone as universal policy -- employees aren't allowed to use judgement to make personal exceptions. And physical IDs can be forged, whereas the existence of a Social Security number in a database can't be.
SSN's aren't perfect, you can still commit identity fraud. But high value financial transactions get safer the more you can verify about someone.
>It's more complicated than that.
No, It's absolutely not. Like i said, I've bought multiple cars with personal checks, all over $10,000, never gave SSN or had credit check. Unless it's some sort of local law, it's a ridiculous policy. Find another dealer.
>Dealers are often involved on the financing side directly, and their systems are just set up to require a Social Security number to put anything into the system.
This seems totally made up and doesn't match my experience at all.
I'm not defending it, just explaining it. Different dealerships will have different tolerances for risk, including allowing employees to bypass standardized requirements. I'm not making anything up, just explaining what's most likely going on with this particular dealership, and how it's not unusual.
If your dealership is letting you drive off with a vehicle with a personal check (not even a cashier's) and without any kind of credit check or database identity verification, that's actually pretty wild. I assume you know the owner or salesperson personally. Otherwise, you could be a rando passing them a forged check, and then they'll be out both cash and car. I don't know many businesses willing to take that $10K+ risk.
Holy moly the US is kafkaesque. Gee.
Duly noted. I might be in your position one day in the far future. Will prep for it.
Thanks :)
> Holy moly the US is kafkaesque.
Not really. Try to rent an apartment in Germany (any EU country really).
Canada / USA is a breeze in comparison.
What is more common in many European countries is a check of a national debt register, to see if you're a known bad debtor. This is distinct from a credit check, because it's not something you need to build up; just something you need to avoid. Someone fresh into the country won't have a problem here.
I moved to Switzerland and all I needed was a clean debt register entry and my employer contract.
Not sure in Germany, but my country borders it and I rented an apartment several times with no credit history. It also never took more than a few hours to sort everything out (make an appointment, decide if I like the place, exchange my personal info, make a second apointment to sign a contract). No credit score in sight.
What? They don't check your credit score where I live (west-eu). They check your pay slip to see how much you make monthly and if it your rent is less than half your paycheck they can decide to let you rent. After that is a two or three month downpayment that is locked in a seperate bank account specifically for this use and is released at the end of the lease. If there is no damage to the rental unit you get back your full amount, depending on what damage is found, the downpayment is used to fix that.
In the UK they’ll do background checks, and check your salary. They’d ask for six months rent in advance if it wasn’t illegal. And even though it is illegal.
In my experience, in the UK, the rental agency required 12 months rent in advance (plus another 2 months rent as deposit) when I was self-employed. They would have accepted monthly rent if I had 5x the annual rent in cash savings, but I didn't.
And then every year after that they required another 12 months rent up front, when it came to the annual tenancy renewal. Track record of paying the rent wasn't good enough to prove that I could keep paying the rent.
That's crazy
They absolutely do ask for a SCHUFA report in Germany. You might eventually find an apartment without one but it's going to limit your options.
What? They are in no way entitled to see your pay slip, or know how much you make. Whether or not you can pay rent is entirely your problem (North EU).
You have a deposit, typically three months rent, that's typically enough to indicate whether or not you're able to pay rent.
>They are in no way entitled to see your pay slip
They absolutely do in Germany and Austria. Renting is almost impossible without pay slips from LOCAL employers. Pay slips from your previous EU country don't count. So relocating is a huge bitch.
>Whether or not you can pay rent is entirely your problem (North EU).
It immediately becomes the landlord's problem here when they're legally not allowed to evict you once you stop paying rent. So they're trying to be 110% sure you're the ideal tenant who always pays on time. Especially since for many private landlords the rent you pay them is also their mortgage payment to the bank.
>You have a deposit, typically three months rent, that's typically enough to indicate whether or not you're able to pay rent.
Deposits don't mean you're able to keep paying rent since that deposit might be borrowed money or from illicit activities. Landlords want to see stable employment (well known employer, that you're past probation period, etc), not that you have a lot of random money in your pocket when you sign the contract.
I don't support this status quo, but it is what it is because it's a sellers' market and governments don't want to change that.
>Whether or not you can pay rent is entirely your problem (North EU).
This doesn't sound right. In which "North EU" country sis this BTW?
Denmark. To be fair I haven't rented an apartment in 15 years. My understanding is that the rule still are: If you don't pay, you get a 14 day warning, if you don't pay within those 14 days, your lease can be terminated the next day. Assuming that you then refuse to move, the landlord can have the bailiff (not sure if that's the right word) kick you out.
> Not really. Try to rent an apartment in Germany (any EU country really).
Been a while for me but afaik nothing has changed: if you lived and worked here before, then a couple of your last salary statements are sufficient (bar the problem of actually finding anything and being accepted, but that is besides the point).
So I am definitely not loving or defending this, but afaik compared to needing years of time to build your credit score in a "smart" way (and by hearsay I would probably mess it up, "just be employed for 3 months" sounds very easy to do?
> bar the problem of actually finding anything and being accepted, but that is besides the point
It isn't besides the point at all. It being a seller's market means landlords can and do ask for whatever paperwork they want which often enough includes a SCHUFA report. You can choose to not provide it but they can also choose to rent to someone else who does.
That’s blatantly not true, before or recently. As it is obvious you never relocated to Europe, at least provide a reference to refute.
I also moved from Canada to California for a new job with lowish six figure salary.
My experience is almost the opposite of yours though. I moved at the end of 2018. I had to put 2 months deposit for rent instead of 1 because I had no credit, but it was otherwise easy. Transferring lots of money over the border is and continues to be a pain but is doable. I think I used OFX for that, my work gives me a bit of a discount.
I also bought a Mazda. New, not pre-owned. For whatever reason, I think it was extra easy for me to secure financing. The guy at the dealership knew precisely what to do, and could answer the credit questions on his own (you know those weird questions they ask like did you have a credit card in 2015, what was your address in 2014, blah blah). Of course the answer was "no" to everything because I had just arrived and had no history. He got me a better deal than the credit union I was with was offering. Did everything on the spot. I think I got 2.9% APR. Maybe not the best, I see ads for 0 to 0.9% sometimes but I didn't really care because I was going to pay it off quick, but that's not the point -- I got financed with zero credit history in the US. I also put $10k on my brand new US credit card which had 6 months 0% interest. I'm sure they wanted me to rack up a bill and then charge me a fortune on interest but I knew I could (and did) pay it in time.
Other places have been a mixed bag. Credit union took me in no problem. In fact, they were camped outside my work which is how they scooped me up. They know we're all high income earners, so smart move on their part.
Meanwhile, Amazon declined to give me a credit card. Citi only give me $5k credit card and would only raise it $1k or $2k/year, meanwhile Capital One gave me $30k.
Also got financing for some couches one time (Synchrony) and then denied another time. I think Synchrony actually checked my Canadian credit history, but only because the guy at Mancini's knew how to do it properly. At the other furniture store, I think they were n00bs and couldn't relay the information correctly.
Weird.
I guess this is what happens when you sometimes have humans in the loop and sometimes not. If any of them just looked at my salary and my employer or poked around a bit, they'd surely know I could pay some $$$.
> We already live in social credit but I fear the ones maintained by companies might be better for the consumer.
Seems to me to be dependent on how the incentives line up.
A credit bureau WANTS you to part with any money you might have for a car. So it works out when they control the issuance of your loan.
But would you want the NRA to control the social credit system regulating a firearm purchase?
> But would you want the NRA to control the social credit system regulating a firearm purchase?
I prefer that to Chase controlling it: https://www.sec.gov/Archives/edgar/data/19617/00019768782300... (the link details an instance in which Chase was alleged to have debanked a bipartisan, multireligious charity headed by a former U.S. governor, senator and ambassador). The NRA would probably let me buy the gun, after all!
Yes…
If you read the comment, you’d notice that there were no loans involved whatsoever.
If you can’t rent or buy a car without a credit score, you should only be allowed to buy a gun until you have proven that you’re a trusted member of the society.
That's not social credit, that's just credit and it's been around a very long time worldwide. For as long as money has been a thing, people don't let strangers or delinquents borrow it!
Social credit would be like if the government didn't let people lend to you for being a commie or trans. Social credit is not something you can just sort out on the phone.
Amex in general is quite good with this sort of stuff.
Requested a personal card with no credit score and that somehow went through fine despite friends in similar circumstances getting rejected. Best guess is because I had a company issued Amex already they could use that as history
Wow. Thank you for sharing this. I have never been to the US (Germany, Singapore)... this sounds just completely and utterly bonkers to me.
youre talking solely about financial credit there bud. different thing entirely