How does a credit score help? In my country we have a register for things like cars than you can see if any debt owed on it, so I guess tracking is on the asset side. Otherwise, wouldn't it just be fraud and the banks would take legal action? That would still produce a record that could be checked too.

Welcome to criminal offense? You get sued, plain and simple. Bank or lender sues you, and either you cooperate or your shit gets taken and if it's still not enough, you get part of your pay docked each month for x time.

In poor people cases, that goes down to minimal pay (exceptions happen if needed, for example caring for elder I believe).

Rich people have enough shit for taking most of the time that it gets resolved at first step.

Bailiffs can place an arrest their income streams and bank accounts and sell their cars and homes.

Also there's a debt registry you can be put into if you're like 3 months overdue and don't come to some kind of agreement with whoever you borrowed from. Usually the banks are pretty lenient if you go to them with a proposal to pay off the debt in small installments because it's less messy than going to court and getting a bailiff appointed