I feel like at some point we just have to accept that the only system of credit that is actually fair is the one that is explicitly run in the interests of society by said society (i.e. in practice, its government). It's not that private banks shouldn't exist; but there should be a bank that anyone can go to and get a loan on conditions that actually reflect their credit risk, and take into account their life situation etc.

Yes, it does mean that there will be a certain amount of defaults that we will all be paying for. I'd rather pay for that than for another yacht of some rich finance bro.