Establishing Credit Here In Argentina

[Ries]

There are no mortgages, to speak of, in Argentina.
Auto loans do not resemble the item with the same name in the USA.
Credit cards keep you on a shorter leash, and most monthly payment plans do not allow indefinite revolving credit.
Thus, most of the reasons banks in the USA want a "credit rating" do not exist here, and so there is no equivalent.
Most loans require a DNI at the very least, citizenship or permanent residency, more likely.
So just arriving, without becoming a citizen, and getting much in the way of loans is very very hard.

First, learn to love the pizza. That should take a few years. Then, you can move on to trying to understand the moving target that is the consumer economy.

 

[PhilipDT]

There are no mortgages, to speak of, in Argentina.

That's just flat out not true.

 

[Inferno.]

There are no mortgages, to speak of, in Argentina.

A mortgage is basically a hipoteca. It exists in Argentina.

Anyone know how the credit system works here in Argentina? How do you establish credit? For instance in the US its your social security number and the 3 credit bureaus that all establishments use to determine wheter or not to give someone credit.

As it was said before, Argentina doesn't have a complex credit system like the US as. Almost everything will be done on an individual case using your monthly income, your work history (how many years you have been on your current job) and internals reports that they will run on you to see if you have unpaid debts (credit cards, loans, others).

Ok im a bit confused, its a savings account but you cant save more than 10,000 pesos in it?

Ignore that. There is a, let's call it government project that forces banks to offer a savings account with no monthly fee destined to people with low incomes. It has a few restrictions that include for example a 10,000 limit. If you exceed that amount you will be moved to the "normal" plans like any bank has with fees and extra features. If my memory doesn't fail, that free account it's called Cuenta Universal but you shouldn't get that. If you have a job in Argentina (paid in blanco using a bank account, not cash under the counter) you will probably get a savings account at your name, checking account and credits cards without fees because it's waived. By law you will get minimum a savings account with a debit card without monthly fees to receive your salary, but most banks will offer you more stuffs like credit cards and that sort of stuff.

 

[Gaucho_ec]

Ok im a bit confused, its a savings account but you cant save more than 10,000 pesos in it?

Yes. Exactly.
http://www.clientebancario.gov.ar/default.asp

Con el objeto de extender los niveles de bancarización de nuestro país, el Banco Central de la República Argentina creó un nuevo instrumento bancario, la Cuenta Gratuita Universal. Su característica principal es que no tiene costos de emisión ni de mantenimiento y está disponible para todas aquellas personas mayores de edad que no tengan otra cuenta bancaria.

Esta cuenta no admite que el total de acreditaciones (depósitos en efectivo, en cheques, transferencias, etc.) supere los $ 10.000 en el mismo mes. Asimismo, aquellas cuentas cuyo saldo promedio de los últimos tres meses sea mayor a $ 10.000 deberán ser cerradas y el cliente deberá esperar un período de seis meses desde la fecha de cierre para volver a pedir su apertura en ese mismo banco o en otro.

 

[Ries]

To a US citizen, a mortgage has a specific meaning.
Usually, that is a 30 year fixed rate loan, at a very reasonable rate of interest, with the interest tax deductible.
And even today, if you have a pay stub and are breathing, you can get one.

This does not exist in Argentina.
Please, walk into any Banco, and ask for a fixed rate, 4%, 30 year loan, with ten percent down, and let me know how you do.
Santander is currently quoting a 20% rate for a six year hipoteca, which, I believe, is as far out as they will go.

The entire US housing market is based on this- fixed rate long term loans that the US federal government essentially pays 1/3 of.
This makes the residential construction industry exist, it makes homes sell very quickly and easily (compared to Argentina, for sure) and it is completely alien to the Argentine way of thinking.

The entire reason for "credit ratings" in the US is because everybody is so addicted to consumer credit, and the industry makes such a huge amount on the interest.

Cuotas in Argentina are very different- usually, the inflation over the period of the loan wipes out the interest expense, and then some- the companies selling things on Cuotas are not doing it to make money on the interest, they are doing it to move the merchandise.
Conversely, in the US, it is possible to buy a car, or a fridge, for essentially the retailers cost, and they make ALL their profit on finance and interest charges.

Its just a completely different economic model.

 

[camino no tomado]

As a bit of an addendum to Ries's post, many countries have home financing instruments known as mortgages, however it's not normal for the interest rate to be fixed for the entire 20-30 year amortization period. Rather the mortgage is broken into terms--which can vary from a month (sometimes referred to as a floating rate mortgage) to (more typically) 3, 4 or 5 years--at the end of which they are renewed at the then prevailing interest rates. Also, to my knowledge the US is the only country in which the interest paid on a mortgage is deductible from one's income tax. That's simply a tax policy to encourage home purchases, not an intrinsic feature of mortgages.

Correction: Apparently the Netherlands, Norway and Switzerland also permit mortgage interest deductions in full, and Belgium, Ireland and Sweden in part. All other countries do not.

 

[Ries]

Since the OP uses a Lakers logo for his avatar, I was assuming he was from the USA, and, hence, thinks of "mortgages" and "credit ratings" using the US definitions.
Certainly, I could be wrong, and he could be talking about how they do it in Ireland or Australia.

(A variety of other countries, including the Netherlands, Norway, and Switzerland, have varying deductibility for mortgage interest- http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction
but it is mostly associated with the US.)

 

[camino no tomado]

(A variety of other countries, including the Netherlands, Norway, and Switzerland, have varying deductibility for mortgage interest- http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction
but it is mostly associated with the US.)

Thanks Ries, I was in the process of correcting that when your post appeared.

 

[camino no tomado]

Also although I understood that the question was most likely posed in an American contex, my point was that the Argentine hipoteca's would not have to meet the criteria of an interest rate that lasted for the full amortization period, nor income tax deductibility of interest, to be considered a true mortgage. Regarding the tax deductibility, the US is the only major economy in which this is permitted, and given the cyclical nature of property values, many financial advisers now recommend for people to think of their homes as a regular expense, rather than purely as an investment. In light of that ... and the enormous hit it represents to tax revenues ... if it weren't such a sacrosanct policy in the minds of US citizens, I suspect it would have been eliminated long ago.

 

[Hybrid Ambassador]

That's just flat out not true.

Spanish dictionary saz, Hipoteca=Mortgage.

hipoteca - noun feminine mortgage

·[segunda] hipoteca

·second mortgage , remortgage

·levantar una hipoteca

·to raise a mortgage

·[redimir] una hipoteca

·to pay off a mortgage

·hipoteca dotal endowment mortgage