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In August, the singer Post Malone casually brought up the subject of central bank digital currencies to Joe Rogan, host of the most popular podcast in America. “No way,” said Rogan. “I think that’s checkmate. That’s game over.”

He was concerned that countries might create scoring systems that evaluate citizens based on social or political criteria, then use those scores to block access to money. “What they’d like to do is be able to strip you of your money, and to be able to lock you down,” he said. “And then make sure that you comply.”

Concern over what has come to be known as a social credit score is becoming a political identifier in the US. Since 2021, just over a dozen Republican-led states have passed laws preventing state agencies from considering environmental or social factors in their investment decisions. In March this year, a group of 19 Republican governors signed an agreement confirming their commitment to these laws, adding a vow to protect consumers from social credit scores that might affect their access to banking or loans.

In May, Ron DeSantis, the governor of Florida running for president, signed a law doing just that. Banks in Florida may not use a social credit score that considers political opinions, speech, affiliations, religious beliefs, ownership of firearms or support for the fossil fuels, timber, mining or agricultural industries. Rogan is adamant that he is not a Republican. But he’s not just one guy worried about the future. There is political muscle behind the American fear of social credit.

But the US already has its own private, opaque and often arbitrary system for scoring and allocating credit, which already limits access to loans, rentals and in some cases even employment. The Florida law assumes that it’s possible to evaluate credit in a way that is purely “quantitative, impartial and risk-based”. That may be true. America’s current system, however, offers a quantitative score without the guarantee of accuracy and disproportionately affects some social groups.

Credit is inherently social. To offer a loan or a line of credit is to imply that there is some kind of ongoing relationship, that you can know now how someone will act in the future. Until the middle of the 19th century in America, this knowledge was local and anecdotal. A merchant leaving a tab open might require a co-signer on a promissory note for some dodgy customers, for example. Credit relationships among cities and across oceans, however, required local correspondents — people who could vouch in New Orleans to a lender in Liverpool.

It wasn’t until after the Panic of 1837, however, when all these correspondent relationships failed at the same time, that the US developed what we think of now as private credit rating agencies. As Bruce Carruthers of Northwestern University points out, this was a process of turning uncertainty into risk. Postmasters and bankers would secretly record subjective impressions all over the country, sending the agencies often contradictory reports that were turned into numbers. Credit scores were precise, but not accurate.

The continuing lure of a number to reduce uncertainty still doesn’t guarantee accuracy. There is a maddening record of wrong information in consumer credit scores. This can be the result of mixed files, where the reporting agencies simply confuse two different people; medical debt, a poor predictor of financial behaviour; and identity theft.

Despite repeated promises to Washington, credit reporting agencies often fail to respond to attempts to correct the record, or drag out disputes, encouraging people to pay wrong debts just to clear their scores. And, predictably, people disputing lines on their credit reports are disproportionately young, black and Hispanic.

Disputes reported to the Consumer Financial Protection Bureau have risen over the last several years, from just over 300,000 in 2020 to almost a million in year to September 2022. This growth comes in part from an increase in identity theft. The credit reporting agencies also have argued that the rise in disputes comes from credit repair organisations — a cottage industry that helps consumers walk through the complexity of arguing over their credit scores.

Rogan and Malone are worried about the capricious loss of access to banking and credit. That is indeed a vexing problem. It is also, unfortunately, the system already in place.  

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