For People with Bad Credit, China’s ‘Social Credit’ Scores Sound Like an Actual Nightmare
Everything from volunteering in your community to running a stop sign—or criticizing the government on social media—affects these “social” scores.
If you’re one of the third of Americans who have bad credit, you know how difficult life can be with a subprime credit score. When your credit is shot, things that should be easy, like leasing a car, buying a home, getting a loan, and even renting an apartment, can be downright impossible to achieve.
In the U.S., even a small mistake, like forgetting to pay a utility bill or being more than 30 days late on a student loan payment, can result in a dent in your credit report that could take almost a decade to wipe clean. During that time, legitimate lenders are free to turn you away at the drop of a hat, making it tempting to fall victim to predatory payday loans, which can trap credit-poor borrowers in a cycle of seemingly unending debt.
So yeah, living in this country with bad credit can really suck. But let’s pause for a moment to count our blessings, shall we? Being unable to qualify for a loan or an apartment is bad, but imagine if having bad credit would cause your internet connection to slow down. Imagine if having bad credit would bar your kids from going to a good school or stop you from buying plane or train tickets. Imagine if your credit score affected how many matches you could get on a dating app or what hotels you were allowed to stay in.
This might sound like the plot to a dystopian YA novel, but it’s actually real life for Chinese citizens.
China is scoring more than just their citizens’ credit history.
The Chinese government began building this credit system about three years ago, and by 2020, it plans to have assigned a score to all of its 1.4 billion citizens. While the harsher-than-average punishments for slipping up might seem a little nuts, upon first glance, this doesn’t seem so much different from our system.
But these scores aren’t just markers of a person’s financial history. While the new Chinese scores do take into account missed payments and delinquent accounts, just like ours do, they also take it several steps further. These scores are actually a marker of a person’s “social credit,” and the way they’re calculated has critics of the system up in arms.
“Good” behavior is rewarded while “bad” behavior is punished.
Every citizen is awarded 1,000 points to start out with, and through their subsequent, day-to-day actions, they can either increase or lower their score, which range from A+++ to D. According to an article from Foreign Policy:
“Get a traffic ticket; you lose five points. Earn a city-level award, such as for committing a heroic act, doing exemplary business, or helping your family in unusual tough circumstances, and your score gets boosted by 30 points. For a department-level award, you earn five points. You can also earn credit by donating to charity or volunteering in the city’s program.”
Other ways to dock your score? Getting caught jaywalking, spending too much time on certain websites, buying too many video games (??), lighting up a cig on a train, drinking and driving, and—perhaps most troublingly of all—criticizing the government on social media.
Government critics are already feeling the pain.
That last social “sin” has critics of the communist party up in arms. According to an article from CBS News:
“The fear is that the government will use the social credit scoring system to punish people who are not sufficiently loyal to the communist party, and trying to clear your name or fight your score is nearly impossible since there is no real due process.”
Already, outspoken government critics and investigative Chinese journalists are finding that their low social credit ratings are costing them their freedom.
“I can’t buy property, my child can’t go to a private school,” said Liu Hu, a Chinese journalist who recently tried to buy a plane ticket and was rejected because his name is currently on the list of ‘untrustworthy’ citizens. “You feel you’re being controlled by the list all the time.”
The system is supported by a massive amount of surveillance.
These fears are justified, given that Chinese police have started wearing Google Glass-inspired eyewear equipped with cameras and facial recognition software, supplementing the country’s already massive surveillance state. According to a piece on Big Think:
“It’s estimated that China has 176 million surveillance cameras in operation now, with plans to more than double that by 2020. The stated goal of this surveillance infrastructure is to deter criminals, but so far there seems to be no crime too small to punish. For instance, Chinese officials in Fuzhou have been publishing the names of jaywalkers, and it’s been reported that citizens might soon be punished for being seen smoking in non-smoking areas or driving poorly.”
Most Chinese citizens approve of the new system … for now.
While all this Orwellian surveillance and judgement is concerning, the majority of Chinese citizens are currently sitting at the top of the credit scoring system, a position that comes with a set of serious perks. For example, Business Insider reports that Baihe, a major dating site in China, is boosting the profiles of “good” citizens, meaning people in the A+ pool are probably getting more dates than those languishing at the bottom. Additionally, people with high social credit scores can enjoy reduced interest rates on loans, rent things without having to put down a deposit, and even get discounts on utility bills.
And many people are reporting that the increased focus on behavior has actually improved life in the sprawling Asian country.
“I feel like in the past six months, people’s behavior has gotten better and better,” a 32-year-old entrepreneur named Chen told Foreign Policy. “For example, when we drive, now we always stop in front of crosswalks. If you don’t stop, you will lose your points. At first, we just worried about losing points, but now we got used to it.”
If you want to learn more about how your credit score works, check out these related posts and articles from OppLoans:
- The OppLoans Guide to Understanding Your Credit, Credit Report and Credit Score
- How Bad Credit Can Affect Your Utilities
- Is the Credit Blacklist a Real Thing or an Urban Myth?