social credit rating australia vs china chinese credit repair systems similarities differences

Can we compare Australia’s credit rating system with China’s social credit system? Yes we can …

If you boil both of these systems down they are in large part about controlling the constituents of a nation. Capitalism controls via fiscal measures and totalitarian states have a few more levers to pull in making their citizens obey. It is always easier to see things in others than in one self. We in the west, get worked up about what we see as injustices in China, but our own self-reflection is pretty weak.

Comparing Australia’s credit rating regime with China’s social credit system is a good example of this.

“Money makes the world go around”
– Fred Ebb & John Kander, Cabaret, 1966

You may not have an FBI or ASIO file but you probably have a consumer credit file. The information in this file can be more damning than most, in terms of how it affects your chances of playing the game of life in any western democracy and free enterprise capitalist economy. Do the wrong thing with money, and by your creditors, and you will be blacklisted by those financial institutions and lenders via the rating system. However, this won’t last forever! Capitalism wants your participation and money. It is all about timing really, as so many things in life are. Your consumer credit file will change over time, as things drop off and new listings will make their presence felt.

“Time isn’t the main thing. It’s the only thing.” – Miles Davis

Understanding Your Credit File Down-under & The Chinese Conception Of Social Credit

The startling fact is that most Australians have a rather sketchy understanding of the credit rating system. Most of us know the broad outline but are considerably more hazy when it comes to the details. The Chinese in contrast know what it means to be a good communist and how to go about achieving that. The societal assumptions upon citizens are far bolder in the People’s Republic of China than they are in Oz. The recent Covid vaccine mandates were a timely illustration of those rare times when civic duty and responsibility became crystal clear. The demands of the many are raised above the rights of the individual. This can be a wakeup call for some in the west that they are living in a community and not on their own little island. Sovereign citizens and right wing terrorism are in the news for all the wrong reasons, as we speak. These issues impinge upon ideas like the right to privacy and privacy laws. Privacy laws govern the credit reporting system in large part here in Australia. If you join the dots you can see how important all this stuff is to the very idea of being an Australian and what kind of nation we live in. There have been mass protests in Chinese cities, also, in reaction to draconian Covid lockdowns. Human beings don’t like to be incarcerated in small spaces for too long, no matter where they live, it seems. Australians don’t like to be told what to do and where they can go. Melbourne and the Victorian government pushed the lockdown policy about as far as you could before mass scale public insurrection erupted. Anti-vaxers and sovereign staters marched in the streets to protest mandates and other restrictive social health policies. Privacy laws and issues were encroached upon during the global pandemic in Australia. Comparing Australia’s credit rating regime with China’s social credit system makes for interesting reading.

What’s In Your Consumer Credit Rile?

“An investment in knowledge pay the best interest.” – Benjamin Franklin

Your credit rating is based on a point’s system, which is usually calculated to be between 0 and 1, 200. The higher the number the better chance of being approved for credit. The talismanic ‘algorithm’ is utilised for working out this determining magical number. Yes, a computer is employed to crunch the numbers in your favour or not, as the case may be. Financial institutions and lenders will consult your file and make their decisions upon this basis.

Therefore, your consumer credit file will identify you via name and address, date of birth and employer. It will contain information relating to loans, debts, and consumer history. Negative stuff like defaults, court judgements, bankruptcies, and failures to meet repayment obligations are writ large, of course. And of course identity crimes can cause your credit rating to be rapidly destroyed.

The Privacy Act Governs Credit Reporting in Australia

Privacy laws remain in place to restrict how this information can be disclosed within our society.

“Part IIIA of the Privacy Act 1988 (Part IIIA), the Privacy Regulation 2013 and the Privacy (Credit Reporting) Code 2014 (CR Code) state how a credit reporting body and credit providers must handle the personal information in your consumer credit report or any personal information, such as a credit score, which is derived from the personal information in the report.

A credit reporting body or credit provider that is an APP entity must also comply with the APPs when handling personal information more generally.” – OAIC, 2022

Living During The Time of The Great Hack

“The development of the Internet has posed new challenges to national sovereignty, security and development interests.” – Xi Jinping

We live in a period when our personal data leaks like a sieve. The Optus and Medibank breaches have exposed the inadequate digital security provided by the financial institutions we deal with on a daily basis. Government bodies and corporate giants have been revealed to be full of backdoor openings when it comes to keeping out hackers and our information safe from prying eyes.

“ABC Investigations have uncovered a vulnerability in the myGov and ATO systems which is being exploited by cybercriminals to defraud the taxpayer. It’s a loophole which no amount of careful management of your online activity can prevent.” – Curnow, ABC, 18 December 2022

The new ‘smart’ criminal has put away hardware like guns and taken up cyber instruments to fleece Australians of their wealth via digital identity theft. White collar crime has a much better record for the perpetrator in avoiding justice in Australia.

Our financial security has never been at greater risk and institutions are declaring their helplessness in the face of smarter and better organised cyber criminals.

Social Credit Exists In Australia & Not Just In China

Social credit is an interesting concept in light of our recent travails with Covid. How do you think your own social credit status fares in the current climate? Do you have plenty of Brownie points on file in regard to your contribution to the community and your state? Are you a good citizen and what does that mean in 2022/23 and beyond in Australia? Does the credit rating system place too much emphasis on money and materialism? Is this the only real arbiter of civic responsibility we have and is this an indicator of our moral failure at the societal level? Do billionaires and wealthy people always do the right thing?

“Police have ruled out taking any action against those who attended a dinner party hosted at an estate owned by the billionaire Anthony Pratt during Victoria’s fifth lockdown.” – Shepherd, The Guardian, 16 December 2022

Does their money make them better people than poorer folk? Those among us who got all their vaccine doses were given digital passports via Medicare cards to travel across state borders and into hospitality venues in towns and cities. This is, in effect, an example of a social credit system run on public health determinants. For some within the community the memory of this remains a sore point, as they lost jobs and were confined in their movements. Nathaniel Train and Stacey Train were school principals who were adversely affected by these social credit policies. Their heinous slaughter of two young police officers and their neighbour, Alan Dare, in Queensland has been linked to this overreach of the state into their lives, according to recent investigative media reports.

“”He [Train] said he was an ‘anti-vaxxer’ and had lost his job because he wouldn’t get vaccinated and couldn’t see his family in Queensland,” the farmer said.” – Calliman, ABC, 2022

I raise these emotive issues to show how this stuff is not some dry legal and accounting matter but, rather of acute relevance to our understanding of who we are. Comparing Australia’s credit rating regime with China’s social credit system reveals many of the same issues challenging governments on both sides of the divide.

The Credit Rating Regime

We hear a lot about the evils of autocratic regimes in the current geopolitical climate, with Russia’s invasion of Ukraine. Totalitarian states are the boogie men and their fiefdoms in our minds here in the west. Vladimir Putin and Xi Jinping are prime candidates for most feared despot of the twenty first century. The credit rating system is, also a regime, however, with faceless individuals in financial institutions making decisions which can directly constrain your lifestyle. Some would say that their moves on your fiscal wellbeing are predicated purely on your own behaviours around money and paying stuff off on time. Indeed, that you only have yourself to blame when it comes to the loss of points on your credit file is largely true. However, cultural prejudices against sections of our population like Indigenous Australians, LGBTQI+ individuals, those with a disability, and even women do remain. The credit rating system is operated by human beings, after all and they take their own biases into everything they do. The banking and finance sector at the highest decision making level is predominantly peopled by white men. Progress on shifting deeply embedded cultural biases is being made, slowly but surely.

Robodebt An Example Of Data Sharing, As In Social Credit Systems


The previous Morrison government’s Robodebt scheme has just been the subject of a Royal Commission. This is another example of data linking, like the Chinese social credit system. Information from the Australian Taxation Office (ATO) was provided to the Department of Social Services for individuals receiving welfare payments. This was then applied to them via an algorithm, which averaged out their earnings over the duration of their time receiving welfare payments and resulted in individuals owing large sums to the government in many instances. Vulnerable individuals took their own lives in some cases due to the perceived stress of owing such large amounts of money in their wretched economic circumstances. The Royal Commission has revealed that Scott Morrison, the then Minister in charge of social security, and senior public servants were likely aware of the scheme’s illegality from the very start and ignored the legal advice from the government’s own lawyers. Millions of dollars had to be repaid to wrongly persecuted Australian welfare recipients and a class action was settled against the government. The process was wrong on several grounds with numerous exaggerated amounts of money being incorrectly applied to members of the poorest section of the Australian population. Privacy laws are again at the heart of this matter, as the government’s right to cross reference an individual’s financial data from the tax department with other government departments is the nexus point here.

“The royal commission into robo-debt has just finished its second round of hearings into just how the federal government ended up wrongly issuing debts to 400,000 welfare recipients, which saw it pay $1.2 billion in compensation following a 2020 court settlement.”

The method the government deployed in the crackdown was called income averaging, which used Tax Office annual income data and smoothed it over 26 fortnights, presuming income was the same across each, and put the onus on welfare recipients to prove they didn’t owe the money.” – Thompson, SMH, 2022

Income averaging and making the welfare recipient legally responsible to prove they didn’t owe the debt, rather than the other way around, were basically wrong on several legal grounds. Once again, however, we will not see anyone prosecuted for these critical and costly failures. Memory loss was endemic for all the politicians and public servants who took the stand in this Royal Commission. Public servants and white collar crimes invariably go unpunished in the modern Australian state, which is in stark contrast to the crimes committed by less well educated Australians.

Australian Prison Population Stats

The Australian prison population increased from the 2010 rate of 29, 700 to the 2020 rate of 41, 060.

29% of the prison population are Aboriginal and Torres Srait Islander, whilst they make up only 3.3% of the general population.

73% of prisoners had been in prison before.

63% had education levels below Year 8 of secondary school.
– (AIHW, 2021)

The Chinese Social Credit System

“Happiness does not fall out of the blue and dreams will not come true by themselves. We need to be down-to-earth and work hard. We should uphold the idea that working hard is the most honourable, noblest, greatest and most beautiful virtue.” – Xi Jinping

The Chinese government has far fewer individual privacy law concerns when it comes to linking all data in one place as it pertains to the citizens of the PRC. Therefore, the recorded behaviours of each individual can be measured and weighed up in a much more comprehensive point system. This may involve records of consumer spending, fines for things like transgressions and other legal indiscretions, and public health policy records for Covid. However, reports out of China reveal that the implementation of the social credit system has not been well implemented as of this date in 2022/23. Documentation uptake has been patchy and uneven from region to region. The system is regulated by a myriad of material but there remains no clear definition of ‘credit’. The system has no defining evaluation standards and there is an arbitrary nature to punishments and rewards. (Drinhausen, 2022) The anecdotal evidence about previous communist regimes, as in the Soviet Union, points to plenty of problems in the implementation of totalitarian policies. Corruption, misuse of power, and state functionaries neglecting their tasks have all been reported in many communist states.“

Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and beliefs had been shaken.” – Xi Jinping

“Complaints that China is a “low trust” society have long been widespread: Chinese society is seen as suffering from a moral vacuum as a result of the turbulent economic and social changes since the beginning of reform and opening in 1978. The growing wealth in economically developed regions came at a price, as they suffered most from insufficient supervision of market actors, environmental and food safety scandals, violations of labour law and IP rights as well as widespread corruption…” – Drinhausen, 2022

In 2015, the political scientist Daniel Bell published a book, The China Model, which trumpeted China’s political system as a viable and even appealing alternative to Western democracy. At the time, the notion that China hadn’t merely risen but was fated to continue rising indefinitely was still a popular, if somewhat lazy, trope. Bell’s more far-reaching argument was that East Asian “meritocracy,” however undemocratic, allowed qualified leaders to prioritise the community’s long-term interest while eschewing the more fleeting whims and passions of the masses. The book came out just as the prospect of Donald Trump running the U.S. government was looking more plausible. Four years of democratic chaos at home, including during the COVID outbreak, made authoritarian competence abroad seem both pleasant and predictable. In practice, however, the Chinese “model” quickly went to work disproving its own premises. On the night of Joe Biden’s electoral victory in 2020, Xi Jinping reportedly told the president-elect that “autocracies will run the world.”

(Hamid, The Atlantic, 2022)

Many commentators see a battle going on between dwindling democracies and the rise of autocratic regimes around the globe. The United States may well be in a fight for its democratic soul between the Trumpist GOP forces and the Biden led Democrats. It will be interesting to see if a successful prosecution of Donald Trump and his co-conspirators can be achieved following the lengthy inquiries by Congress and the DOJ. Whatever the result the market will still want your money and minions will still pour over your credit file in search of accurate data as it pertains to your credit worthiness now and in the future.

Repairing Your Credit File

In Australia, you can repair your credit file if there are errors or inaccuracies present. The details contained in your credit rating file must be a true recording of the facts. Your credit score can only be accurately determined if the details on your file are exactly correct.

Get a copy of your credit file and examine it carefully. You can request a free copy of your credit file from each of the 3 credit bureaus every 90 days. If you have been denied credit on the basis of information contained within your consumer credit report you can, also request a copy of this file for free:

Illion Ph. 1300 734 806
Experian Ph. 1300 783 684
Equifax Ph. 138 332

If you discover what you think are errors and mistakes in your file listings about overdue timings, protocols followed incorrectly, disputed defaults, unrecorded payment plans, and identity theft false listings and applications, then, you should immediately contact the credit provider and the credit bureau. If you experience difficulties in doing this there are credit reporting law specialists who can help. If you find the process beyond you for whatever reason it pays to consult an expert for best results. There are No Win No Fee credit repair lawyers such as ourselves operating in this field – contact us to find out more.


Australian Institute of Health and Welfare, Adult Prisoners, 16 September 2021, Viewed 20th December 2022.
Calliman Rory, Police shooter Nathaniel Train breached Queensland border in a car carrying weapons months after school resignation, ABC News, 17 December 2022, Viewed 20th December 2022.
Curnow Sarah, Fake myGov profiles are being used to hack ATO accounts. Sue found this out the hard way, ABC News, 18 December 2022, Viewed 20th December 2022.
Drinhausen Katja, China’s Social Credit System in 2021, Mercator Inst for China Studies, Updated May 2022, Viewed 19th December 2022.
Hamid Shadi, Americans Should Not Be Tempted by China’s COVID Policies, The Atlantic, 11 December 2022, Viewed 20th December 2022.
Office of the Australian Information Commissioner, What is a credit report? , Viewed 20th December 2022.
Robodebt Class Action Settlement, , Viewed 20th December 2022.
Shepherd Tony, Police rule out action on party at billionaire’s mansion during Victorian lockdown, The Guardian, 16 December 2022, Viewed 20th December 2022.
Thompson Angus, Mystery at the heart of robo-debt crackdown, SMH, 17 December 2022, Viewed 19th December 2022.