I did not know UK had it to. What it is like in UK?

I am not familiar with the way a person can file for bankrupcy but I found the article from Croatia that describes it. Same policy is, I believe, in all ex-Yu countres. You can translate it, sinc I'm not to "financial lliterate", to translate it in my own words. https://www.tportal.hr/biznis/clanak/zaglibili-ste-ovo-morate-znati-o-osobnom-bankrotu-20160812 I know that if company files for the bancrupcy, the founder of the company can not open new company on his/her name for next 5 years.

As I understand, when signing the contract with the bank for loan, both parties have to present evidence they have something to back up the loan. For bank that is not hard to present, and for person, in my case, is apartment we live in. The bigger the loan you ask for, the richer you have to be in order to support it. I don't know how it goes with a non-purpose loan. The bank will probably foreclose if you don't pay, or in the case of a loan with a guarantor, if you don't pay - the guarantor is obliged to repay your loan.

Also, I am not aware we have somethinhg similar to credit score company. Maybe our tax office does some mediation in this sense.

Yes. If you want a credit card, you must have an indefinite contract at work so that they can be sure that you have enough funds to pay it off. The amount of the allowed minus is usually 2-3 monthly salaries. As for the loan: also an indefinite contract. The amount depends on the salary, the monthly installment cannot exceed, I think, more than 1/3 of the salary. For some loans, you need a deposit or proof that you have the ability to repay such a large loan (usually proof of ownership of real estate or perhaps shares). And housing loans are most often taken out with a mortgage. You "give" the apartment you buy on credit as a cover for the loan you use to buy that apartment. When you pay off the loan, the apartment is 1/1 yours. That's how we bought an apartment... that is, we are in the process of buying it. We haven't paid all of it yet. People who are employed in government companies are the best candidates since it is very difficult to get fired there. So bank is sure you are going to be able to pay. Credit cards and shopping cards follow the principle of a permanent order (lietral translation). The bank collects its installment automatically every month until it's all paid out. You don't have an option where you don't pay, unless you don't have funds in the account, but usually payments are made from the current account - the one on which your salary is deposited.

Yes, we do not have that in my country, but I expect we will in future. We are 20-30 years behind America. I understand equation is not simple as "i use credit card = good". It's how it's used.

You really did get the job done! Thank You! I see now the logic behind the credit score way better.

Ok, lot of that I can understant to be important for a bank so thank You for making it more clear to me.

I assume you are from America. In our country (in the Balkans), a completely different logic prevails. Although I believe that this principle will come to life in our country at some point, since we follow the trends, and America is always light years ahead of us.

Yes, I somewhat understand. But isn't someone who doesn't use credit cards and manages to cover all their expenses with their income the safest for the bank?

What I noticed on various memes, etc., is that the more you use your credit card, the more your credit score increases. If you want to take out a loan from the bank, the higher the credit score, the better chance you have of getting a loan. Aren't people who use credit cards a lot more risky to the bank, in the sense that they might not have enough funds to repay the loan if they spend a lot? What's the catch, since I can't understand the principle?