Credit scores were developed as a measure of the risk that a loan applicant will not repay debts. Advancements in technology and information sharing have contributed to the proliferation of credit score use in small-business lending and in consumer loan transactions, including mortgages, credit cards, and auto lending. They can be used to determine whether an applicant obtains a loan, the amount of extended credit, and the price charged. Credit scores are also controversially increasingly being considered in decisions not directly related to credit.

Predicting a borrowers’ likelihood of repaying debts is challenging and can involve a multitude of considerations. Relatively standardized credit scores provide a universally understood ranked measure of credit risk. This has the potential to accelerate credit decisions, lower costs for the lender ...