EXPLAINED: How Credit Scores are a Scam to Keep You Poor!

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Credit scores are a scam that only helps the rich and keeps the working class poor. You must have a credit score to take out a loan, buy a car, apply to rent an apartment or even have a cell phone plan. Senator Nina Turner explains and breaks it down on Unbossed.

The credit score is a strange piece of financial alchemy. And yet many Americans see their scores—which claim to encapsulate everything from one’s credit history to one’s attitude toward debt—as normal, even natural.

But, of course, it is not. Credit reporting, in its modern sense, is fewer than 200 years old—invented as part of America’s transition to capitalist modernity. Already, however, its history has proved both alarming and empowering, helping millions realize the American Dream through access to credit, while integrating many more into surveillance networks rivaling the NSA’s. Just as importantly, it has saddled the majority of Americans with a lifelong ‘financial identity’: an un-erasable mark that reflects bad behavior in the past and compels good behavior in the future.

At a moment when credit reports are being used to inform a wide range of life decisions—from where people live and work, to how much they’ll pay for insurance and utilities—this history is more important than ever.

For much of debt’s 5,000-year history, credit reporting has been a deeply personal practice. In 18th-century America, for instance, country storekeepers secured loans by asking well-regarded neighbors to vouch for their character to bankers and merchants. And urban creditors mined far-flung rural acquaintances for rumors and hearsay regarding applicants for credit.

Beginning in the 1820s, however, credit reporting began to modernize, as the density of business transactions made the old system too cumbersome. New bankruptcy laws also made loans a riskier proposition. The result was a series of experiments in standardizing credit evaluation. Though these experiments were limited to commercial credit—loans to businesspeople—they would have important implications for the later history of consumer credit rating.

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