But it wasnt that long ago that the credit score we know today, the FICO score, didnt exist. The first general-purpose FICO score came along in 1989, only 25 years ago.
According to my way older relatives, as in from the 1920s to the 1960s, most people didn't have access to credit. My family comes from the midwest. Poor and middle class white people at least...paid cash for almost everything. If you made enough money and seemed clean enough and had a letter from your pastor you could get a mortgage with 10-15 year term on it. Most of my family that lived in the cities back then were in their 30s-40s when they got their first homes, and lived among people just like them. Banks would not give them enough money to buy a house in the rich neighborhoods, only the middle class union people neighborhoods for white people. The ones who lived on the farms? Someone somewhere up the family tree paid cash after working on someone else's farm for awhile and bought their own land, and passed it down, and there was no credit involved. If they needed credit for things they could get on the ledger at the local general store. That was about it. People who were not rich did not have credit like people do now. They paid cash for everything. Banks would not lend money to poor or middle class people except for houses, and you had to have like 30% down and the terms were, as mentioned, 10-15 years tops. My Boomer parents have told me over and over again, that until the 1990s people didn't use credit like they do now. You just didn't. If you could not afford to pay for something you did without. My parents first car loan, which they only got when my dad re-enlisted in the military, had like an 18% interest rate and my parents had to put 20% down. My dad had to show his papers from the military and his paystubs from the military. And several dealerships turned them down. This was the early 1980s. One of the things I hate about credit scores is it enables society to think it's okay for everybody to be in debt up to their eyeballs. This is a new thing, like from the 1990s onwards, the world lived in by the Boomers and every generation after them. It did not used to be this way at all.