"In China, your social credit score determines everything from how much interest you pay on a loan to how easily you can rent a car or get a visa to travel overseas. Your score gets hurt for many of the same reasons you would have a bad “traditional” credit score in the United States—such as paying bills late or defaulting on a loan—but your score will also get damaged by consorting with the wrong friends on social media or being associated in real life with people who have been convicted of financial crimes. It isn’t hard to see that being critical of the government in China would make it hard to participate in day-to-day life—at least financially. A bad score could keep you from getting a job, getting access to health care or finding an acceptable place to live.
That couldn’t possibly happen in the land of the free, could it?
Actually, it’s already happening.
We don’t have a few all-powerful monoliths like the federal government (or Alibaba) recording everything we do, but most Americans don’t realize how much of their everyday life is being tracked and analyzed. Right now, data collection companies’ main goal is selling you things. But it isn’t hard to envision how a few changes in the market could produce something like our Chinese friends’ Big Brother experience.
The choice is up to you, so you should make your choice informed. It might seem tedious, but read the fine print when you sign up for any service—whether it’s Amazon Prime, Google or Facebook. What are you giving access to and what can you opt out of? Be aware of the strings attached to free services. Credit Karma and Mint might offer some useful tools to estimate your credit score or keep track of your finances, but just because you aren’t paying for them doesn’t mean they’re free. You’re exchanging your personal data for that convenience. You’re giving them you.
Your financial life is the most tangible way you can be impacted by this kind of data collection, so it pays to be as knowledgeable as you can. When you know how your credit score is being computed, you can make better day-to-day decisions before a crisis hits. You can learn more about how to do that in my new book, Your Score . It’s a guide designed to put you on equal footing with your lenders."
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