Credit Rating or the Credit Score allows separating good borrowers from the less good borrowers.
Credit Score has two components:
Capability to pay interest and principal
Willingness to pay interest and principal
The first one refers to financial capability. If someone has a steady income, and a low amount of loans, then his credit score will be better. However, is he has taken already too many loans, then his credit score will decrease.
Willingness to pay is a behavioral parameter – one can have the funds, but could be not willing to pay. He would stretch the loan contract, would challenge the lenders, and so on.
Traditional Credit Score systems are focussing on the first part – on the hard facts. SmartCredit.io Crypto Credit Score focuses on both parameters – the capability to pay and the willingness to pay. It’s the way to separate good borrowers from less good borrowers.