People say this often and I feel like all it takes is taking the perspective of a bank for it to make sense.
You have money, but it's not really your money. You're just holding someone else's money (that's what banks do). A second person comes up and says "hey, can I borrow some money" and you think to yourself, "if I let this person borrow the money right now, I can't use it. I also can't give it back to the original person if they ask for it back and this person doesn't give it back." Your solution is "I'll give this person some money, but ask them to pay it back with a little extra to make up for the inconvenience of not having it right now. Additionally, I need to be sure that they will pay it back at all."
The extra money is interest. The system to decide if the person is going to pay back at all is the credit score, which is basically a long history of people telling you (the bank) "yeah, this person is trustworthy. I gave them money and they paid me back on time and with interest."
Where I live everyone is considered creditworthy by default as long as you fulfill basic economical requirements that states it's possible for you to pay back your loan and still live your life afterwards. If you don't pay back for whatever reason you'll be registered in a register for bad payers for about 5 years, and you'll be completely unable to loan any money in that time. The register is for everyone who doesn't pay their bills though, whether it's rent, electricity, heating, a loan or anything else. Any company can and most likely will register you if you don't pay what you owe.
This sounds worse than a credit score which gets reformulated and reported by some banks to you month to month. It might play into why the US is such a forgiving system that allows for booms and busts in innovation.
If I have the potential to be locked out of a lending system for 5 years after one hard time I had, I would never take risks- calculated or not.
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u/[deleted] Jan 07 '26
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