When you fill in the credit application form, the questions about your bank relationship and job and residential stability are compared to database samples of others with similar characteristics. If this isn't your first credit application, the financial institution looks at your credit bureau report and at how you manage your other credit cards and loans. Then, based on a credit scoring formula, you and your repayment risk are evaluated and ranked. This is your Credit Score. These mathematical equations predict who is statistically likely to repay their loan or credit card.
Credit scoring eliminates any bias.
A lender can look at the application, verify that all credit policies are met and then rank the risk statistically. The models are tested and updated constantly. Credit scoring also allows for faster service on your credit application. The credit scoring process is designed to restrict automatic declines. If a low score appears, someone is assigned to look at the application to re-evaluate the information.