this post was submitted on 14 Aug 2023
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But isn't the whole concept of having to 'build credit' insane? In the Netherlands we don't have that
How else would you know a person's credit worthiness when you are being asked to lend them a million dollars? What would you use instead?
If you have any outstanding debts, that's recorded in a registry (BKR), so the banks won't give you a loan (you won't even be able to buy a phone on credit).
If you have no outstanding debts, you are not registered at BKR, so the banks will give you a loan according to their internal formulas (e.g. if you don't have a high salary you won't get a โฌ1 million loan, but you might be able to get a โฌ300.000 one).
So I guess it's like a negative credit system: if you're not credit-worthy, lenders will know (due to being BKR-registered), and otherwise you're assumed to be credit-worthy (in accordance to your salary).
If we want to buy a house for example? A copy of your registry of fines where you get an entry for not paying an invoice or such, your income and your savings are taking into consideration over here.