The U.S. credit reporting system provides benefits to American consumers that
are not available to consumers in countries without such a system. In the U.S.,
both negative and positive credit information about people is collected, and the
information stays with them. This allows companies to extend credit wisely, lowering
the cost of credit to consumers with good credit histories and appropriately
raising the cost of credit to consumers with bad or unknown credit histories.
Because of the sharing of financial information that occurs in the U.S. credit
reporting system, mortgages are processed much faster and they are as much
as 200 basis points (2%) lower. This extends homeownership to more people who
otherwise would not have it.
Consumers who do not wish to participate in the credit reporting system
should have that option, and they do. They can refuse offers of credit and
pay cash for their purchases. Such people should expect to pay more if they
seek credit because both their good and bad credit histories can not be checked.
Most people participate in the credit reporting system and enjoy the benefits
and convenience of good credit.
US Credit Reporting: Perceived Benefits Outweigh Privacy Concerns [pdf],
by Walter F. Kitchenman, The Tower Group (January, 1999)