What's Your Credit Score?

I’m going to be honest with you: your credit score is a largely arbitrary number created by a private company with a secret and ever changing algorithm that was originally intended to help potential creditors figure out whether or not they should lend you money. Your FICO score was originally made by Fair, Issac, and Company in 1958, a full 12 years before the pocket calculator was invented, let alone the computer. Sure, the algorithm’s been tweaked over time, but at its root is a handwritten process written by two guys back when Eisenhower was president.

Now, almost 70 years later, credit checks have become so engrained in American life that many, if not most, don’t even second guess them.

Panama couldn’t be more different. Panamanian banks have internal Credit and Risk Committees responsible for evaluating applicants’ creditworthiness and approving or rejecting loans and credit card issuance. In my personal experience, this committee evaluated my employment and banking history as well as my letters of recommendation when arriving at their decision. To put it simply, in the States you’re a number. The choice of whether or not you get a credit card is made by a computer. In Panama, you’re only getting a credit card if the people on the bank’s committee think you’re an acceptable risk.

Having said that, there’s a company called Asociación Panameña de Crédito (APC) Experian that is trying to create something similar to a credit score, but hasn’t really caught on. They aim to record credit histories and debt obligations, but the problem is that you have to voluntarily enroll in their program. This means that you pay them to curate your credit and create your credit score. Therefore, you are the client - not the lender. If there’s something unfavorable on your report, well, you can just ask them to remove it, which they will. I mean, you’re the one paying them so why wouldn’t they?

If you’re interested in getting an APC Experian account or wind up in a situation where getting one is a necessity, then you’ll have to go to one of their Care Centers and meet with an agent. Panama City has two locations: Albrook Mall and Metromall. There are also locations in Penonomé, Chitré, and David. I have an account with APC, but I’ve never used it. I think I just realized while writing this that I’ve been paying them $14.99 a year for nothing. Oh well.

My point is, your credit score is a weird American cultural thing. You won’t need your American credit score in Panama. A lot of expats are used to this number being so important to their lives that they have a hard time believing me when I tell them that, but, trust me, it’s true. Don’t worry about it. It doesn’t matter if you’ve got an 850 or a 600, no one in Panama knows what you’re talking about. You’re free.