Credit Cards and Consumer Debt
Why I Love Credit Scores

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By bingocards
March 17, 2009

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I know a lot of people really, really hate the very existence of credit reports, credit scores, and the whole rigmarole. They hate that a collection agency can "ding" their credit with the press of a key. They hate that minor mistakes get remembered for seven years. They hate that the process is ridiculously prone to errors.

I love credit reports and credit scores, and I think a lot of folks would, too, if they were forced to do business without them. One quick way you can arrange that is to move to Japan, which has not introduced credit scoring yet (although there are some plans in the offing to do so, which are quite controversial).

Today, I bought a TV. It cost a big chunk of one month's salary, which is to say it cost a little chunk of one day's salary times about two and a half years in which I've been patiently saving for it. I had thought I was going to buy it on my birthday in April but they had the end-of-fiscal-year-oh-crud-we-have-to-make-our-numbers sale in March and there was an unbelievable deal on a display model. (I didn't quite get the "so big you can practically feel the dragon's breath" model but, if I'm sufficiently bored, I will probably be able to count individual coins in the horde.)

So what's this got to do with credit cards? Well, like any big box electronics store, Eiden has their own credit card that they want you to sign up for. I declined, because, quote, "I really do not want to have to go through a credit application right now" (for reasons you will see in a minute) but the manager offered me an additional $50 off the TV and, moreover, offered it to me whether or not I passed the application. Plus they threw in a 5 year warranty, which for a Japanese TV is a lot like taking out a 1 year life insurance policy on an Olympic medalist but, hey, I like free things. Thank you, weak economy, they are truly desperate for sales.

Then came the credit card application. Oh, yay, financial proctological examination time.

It starts with asking for my identification which, since I'm a foreigner, means my Alien Registration Card. There is an awful lot of information printed there, and I got asked questions about it, including asked to explain my visa status and why the "period of stay" shows until August 2008. (Because I came on a 1 year visa last time, I renewed within the year to a 3 year visa, alien registration cards are not issued on visa renewal, and thank you very much Mr. TV Salesman I am legal and the "identification expiration date" is not the "period of stay" but rather the "alien registration re-application date" at the bottom where it says 2012.)


Then we get to the actual application itself. Much of it is like any American credit card application you've ever had.

Then they ask you:

* Your marital status
* How many kids you have
* Your employer (who we'll call to ask for a character reference and whether they have near-term plans to fire you)
* How many employees your employer has (we'll call to check)
* Your salary (we'll call to check)
* How many months you have been working for your employer (Only 1 year 9 months? Hah, I am screwed.)
* Your landlord (who we'll call to ask for a character reference)
* How many rooms in your apartment (we'll check with your landlord)
* How many months you've been in your current apartment (1 year 9 = did I mention screwed?)
* Salary (we'll call to check)
* Total of all outstanding financial obligations

Lets see, am I forgetting anything? Oh, bank information. They don't actually ask for it at the time of application because a) its not considered valuable and b) it would take too long. Why is it not valuable? Because social standing (length of time with employer, character references, whether you're married with kids or not, occupation, etc) is considered to be a near-perfect predictor of financial standing. Why would it take too long? Because BingoBank will not even acknowledge the existence of my account without my official seal on a request to do so, and they will find all kinds of reasons to deny or slow the request even when they have the seal.

(Including, most memorably, when my gym submitted a bill to "Cards Bingo", in the Japanese style. The bank sent the gym an exquisitely polite letter saying, essentially, "We have no customer matching your request. Anyone with legitimate business with our customers can spell their names correctly. Should you have legitimate business with one of our customers you should contact them and rectify your understanding of how their name is spelled.")

Anyhow, long story short, thirty minutes filling out an intensely invasive application (versus perhaps five filling out a minimally invasive application for US credit cards -- which would result in no call to my employer, landlord, etc) and I will probably still be denied credit. I don't know what bank Eiden uses but it isn't BingoBank and, socially speaking, my answers are a series of red flags. (About the only thing going for me is, I kid you not, the fact that I work at a big company. Because, you know, about the only thing that can cause unemployment in a Japanese salaryman is a bankruptcy, and big companies are thought to be more financially stable.)

The fact that I pay my debts/rent/etc on time, have sufficient means to buy myself the TV, etc? Pfft, what does that have to do with it?

So next time you get annoyed at the credit reports, remember: you can buy a TV without having to tell anyone your life story or having them judge you for it. Its pretty neat when you think about it.