By now, you undoubtedly understand that your credit scorecredit history is a key to your your financial well being, influencing factors like the interest rate youll be charged for a home mortgage, a cellular phone strategy, insurance coverage or automobile loan.But now there are new, disturbing reports about how China is using customers credit ratings to likewise identify their political dependability and social status.The new credit-rating system was launched in China this past summer and is run by the Chinese e-commerce giant Alibaba(BABA)and the Chinese holding company Tencent, according to China Daily Asia. The publication also noted the new system uses a variety of data to figure out credit ratingscredit rating, including an individuals hobbies, interaction with good friends, buying practices and lifestyle.However, as Rick Falkvinge just recently blogged at privateinternetaccess.com, the Chinese credit ratingcredit report isn’t affected by only exactly what you purchase. If youre purchasing things that the program appreciates, like dishwashers and child supplies, he wrote, your credit rating increases. If youre purchasing video games, your score takes an unfavorable hit.Other elements that can drive down a credit ratinga credit report on the Chinese system are no-nos such as publishing political viewpoints online without permission or describing controversial current events– such as the current Chinese stock market collapse– in waysmanner ins which vary from the official government variation. However the kicker is that if any of your good friends do this– publish viewpoints without prior consent, or report accurate however awkward news– your score will also
degrade, Falkvinge continued. And this will have a direct effect on your quality of life.Calls and emails to Alibabas US offices for remark on that report were not returned.The American Civil Liberties Union( ACLU)is looking at the Chinese credit system and questioning if it may become a plan for future usages of the credit score system in America. After all, new research
from the US Federal Reserve, for example, has found that credit scorescredit history can assist predict a persons ability to dedicate to a stable, long-term relationship like marriage.However, the possibilities of an abusive, Chinese-style credit score/surveillance system in the United States in the near future are nil, according to ACLU senior policy analyst Jay Stanley. Still, he also said there does appear to be a consistent gravitational pulls towards this sort of habits on the part of numerous public and personal US bureaucracies, and a very genuine risk that many of the characteristics we see in the Chinese system will emerge here over time.So can it take place here? Another credit market observer has some insights. Many companies in the United States are attemptingattempting to develop methods to use everything from lease payment histories to social media profiles to figure out the creditworthiness of someone with thin or no credit, Matt Schulz, senior expert at CreditCards.com, told CBS MoneyWatch.However, those strategies are reallyquite in their early stage and may never have much of
an effect, he added. Either method, were a long way from your Facebook profile being factored into traditional credit rating– and I think a lot of Americans believe thats an extremely greata great thing.