Microblog Memes

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.

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.

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.

A credit score is just a formalized version of the process that everyone already does inside their heads.

Think of your friends. There's one friend that you'd have no problem lending $100 to; you know they are guaranteed to pay you back ASAP. There's another friend who you're pretty sure will pay you back, but it could take a while. And there's that friend that you would be reluctant to lend so much a a pen to, since it's doubtful that you'd ever see it again. Assign a number to each person's trustworthiness (say 2 for the first friend, and 0 to the last) and that right there is a simple credit score system.

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.

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?"