If Congress passed a law requiring everyone in the United States to get a license to be considered for a job or rent an apartment, the nation would rise up in protest. The irony is that such a system already exists and its validity is rarely questioned: the license is, of course, your credit score.
It can open doors or cause them to be slammed shut. A quarter of unemployed Americans undergo a credit check when applying for a job, and many landlords refuse to rent an apartment or a house to a person who has no or low credit. The influence of your credit rating on the availability or price of financing for a car or home can be drastic: For a $100,000, 30-year mortgage, a buyer with a FICO score of 760 will pay almost $70,000 less in interest compared with a buyer with a score of 620, which is close to the average score for people in their 20s today. (See this report from the Credit Builders Alliance.)
The bigger problem is that some 54 million people in the United States (and 4.5 billion people globally) have no credit standing at all. They have been dubbed “credit invisibles.” This doesn’t mean that they are unreliable or inactive.
In the United States, it just means is that their economic behavior — what amounts to a substantial portion of the nation’s daily work — remains outside the purview of the three major credit rating agencies.
[For more of this story, written by David Bornstein, go to http://opinionator.blogs.nytim..._type=blogs&_r=0]
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