It's a para-state agency; while Americans don't have ID cards because they're afraid of surveillance, a private company having a complete database of everyone and veto power over mortgages is fine because it's a private company.
The existence of credit scores has tangible benefits that we take for granted. Without such databases we would all pay much higher interest rates and many more people would be denied loans. Very wealthy people would have little trouble, but low- and middle-income people would find it far more difficult to buy a house or a car. The reason it is better to be run by a private company than the government is not that surveillance, but the near-certainty (at least after everything we saw happen over the past 5 years) that a government credit scores agency would be politicized. We would have the same problems we have with equifax, and a whole new set of problems as e.g. the political party that rewrote the tax code to punish people who voted against them tried to weaponize credit scores.
As seen from another capitalist country, namely Switzerland, I take the "higher interest" rates as a tired argumentative "canard". It's a false idea perpetrated by lobbyists.
We don't have such databases. The difference here is that the bank's mortgage divisions have much lower profits, because checking somebody out is actually done by humans. It costs the credit provider more. US style mortgage broker do not exist.
Low- and Middle- income people here do not have houses because of high real estate prices due to very restrictive zoning (the country is small), and on average much, much, much more expensive construction than in the US. Here people expect a fully concrete house, near-to-passive level insulation, with 30-40 years free of any big renovation.
In conclusion: we do without an Equifax just fine.
...so low- and middle-income people are not buying their own homes under that system, which is exactly what I said. What is the disagreement here?
You say that interest rates are not higher, but that is a meaningless statement if people do not generally buy their homes on credit. Low- and middle-income Americans typically buy a home using a mortgage, and credit scores are an important part of that system.
My opinion point is that maybe if the US tried to do old style approach to home ownership, old fashioned banking, it wouldn't need that many artifices like rating agencies. Why I think that:
Your position is that the lack of a well informed credit market would make interest rates high, precluding acquisition of houses, hence the need for rating agencies.
My position is that truthful, complete information is enough to keep rates low, a market for that information is not necessary for assets which are not liquid (houses, mortgages). Swiss mortgage rate oscillate between 1-1.5%, depending on your financials.
Absolutely everybody buys houses and buildings on credit in Switzerland, due to huge tax deductibles. Those who don't are a rounding error around 99.9%, mainly due to some rare people's estate planning triggers.
Selling cheaper houses and apartments at lower prices has been repeatedly in the last 20 years (as low as a third of the usual price range). They doesn't sell.
Swiss are conservative, they tend to like long term investments with low degradation risk, regardless of current market price levels. Hence high prices, because they want high, long lasting quality.
Again nothing to do with credit information markets.
It's not as good as it once was, and purchasing power is slowly but certainly going down. Everything is tightening up. Switzerland is extremely integrated into the western money circuits. If it goes to shit in the US, it'll follow suit at a much slower pace.
However, Eurasia is replete with countries which try to imitate Western European successes by applying the same receppies. If you can swing it, the purchasing power is 3-5 times larger on the same net income, and you don't have pesky invasions of your private sphere at each corner.
Also, as a Swiss, I can tell you that past the superficial welcome, we're a mountain people. We're really not as warm as others peoples. Over time, depending on your character, it may accrues and impact quality of life.
We are also very disciplined in a lot of aspects of life, even outside work. That is a problem for some over time.
