The concept of credit work was first used in the 1520s; Credit Work each time you open a credit card or loan application.
In the past, lenders evaluated a potential borrower's creditworthiness based solely on reputation before providing credit facilities.
Since the idea was less developed than now, traders made lending decisions based on their individual perceptions of the borrower.
Such a procedure would exclude potentially reliable borrowers because it was subjective and, therefore, subject to bias and manipulation.
The evaluation of a prospective borrower's creditworthiness today takes a more objective approach than the subjective method used in the past.
Instead of relying on assumptions and personal convictions, creditors now evaluate a borrower's credit history by reviewing their credit report, which is obtained from credit bureaus.
The borrower's credit history over the previous one to seven years is described in the credit report, including the total amount borrowed,
payments made, on-times of payments, history of defaults, history of auctions or foreclosures, etc.
Credit bureau scores, which are based on a borrower's credit history, are used by lenders to determine whether or not to grant credit.