John D . Rockefeller and his family received consumer credit ratings like everyone else . Their names and ratings appeared beside those of fellow citizens , as shown here in The Credit Rating Book for Cleveland , 1909 .
one of the most powerful surveillance institutions in American life , yet we know almost nothing about it . The industry is currently dominated by three major bureaus — Equifax , Experian and TransUnion . Together these private firms track the movements , personal histories and financial behavior of nearly all adult Americans .
Until the late 1960s , when the reporting industry suddenly became a lightning rod in debates over database surveillance and privacy , credit bureaus worked in quiet obscurity . They seemed to come from nowhere during the late 20th century and to exemplify the frightening new realities of computerized surveillance . Yet many of these bureaus have been around since the 1920s or earlier . In fact , two of the nation ’ s leading bureaus , Equifax and Experian , have roots dating to the 1890s .
The consumer credit bureau was a vital information infrastructure upon which American consumer capitalism was built . These surveillance systems supported new consumer lending and financing industries that emerged during the first half of the 20th century , as automobile makers , department stores , mortgage companies and banks learned how to turn personal debt into corporate profits . Without this infrastructure , the modern credit economy and today ’ s digital commerce would be inconceivable . More than any other institution , the consumer credit bureau formalized financial identity as an integral dimension of personal identity and established a technological framework for predicting credit risk and extracting debts .
While we know quite a bit about the history of consumer culture in the United States — its advertising , its spectacular commodification , its desires and deceits — we know much less about how all of this consumption , much of it done on credit , was even possible to transact . This is no trivial detail . The ascent of consumer capitalism , after all , is inextricably linked to the growth of institutional credit at the turn of the 20th century . It was nothing new for a local grocer or tailor to trust his well-known customers to pay later . This kind of informal open book credit was pervasive in 19th-century America .
But how could new institutional lenders — department stores , mail order houses , installment dealers , finance companies and , later , banks — trust total strangers , hundreds or thousands of them , to repay a debt ? The answer is that they could not . But neither could local grocers or tailors . As eastern cities and upstart interior towns filled with unfamiliar faces after the Civil War , the problem of judging creditworthiness was a problem for everyone , including small shopkeepers who allowed their neighbors to run up debts . In this new world of anonymity and transience , consumers who looked “ good ” — well dressed , professional occupation , well connected — often turned out to be the worst deadbeats . And just as troubling , some who looked “ bad ” — shabby clothes , low-skilled job , no references — often turned out to be entirely reliable and loyal customers . How could a merchant identify the “ good ” consumers and avoid the “ bad ” ones ?
This problem , the confounding task of deciding whom to trust and whom to invest in , led to the development of systematic credit surveillance in the United States . The first organizations devoted to monitoring the creditworthiness of American consumers appeared in New York around 1870 . The idea quickly spread . By 1890 consumer reporting organizations could be found in cities and towns across the nation , from New York to San Francisco . These early ventures were a motley array of private agencies and voluntary protective associations . While some produced little more than blacklists of debtors and delinquents , others developed complex identification and rating systems that monitored the lives and fortunes of entire city populations . The most ambitious published annual reference books in which the names , addresses , occupations , marital status ( for women ) and credit ratings of more than 20,000 individual consumers were listed .
From the beginning , credit bureaus and credit departments were eager adopters of new office technologies , from vacuum tube and teletype systems to multiline telephone banks and mechanical filing devices . The most probing and comprehensive credit information was useful only if it could be quickly located and communicated . Speed was crucial when credit managers or sales clerks requested credit checks , often with the customer waiting anxiously nearby .
The machinery of credit surveillance was typically operated by women , often rooms full of them , tethered to headsets and switchboards among columns of filing
30 FINANCIAL HISTORY | Summer 2017 | www . MoAF . org