A numerical credit score is only one data point in a lending decision, albiet an important and useful summary one. In mortgage lending they call this concept t

A numerical credit score is only one data point in a lending decision, albiet an important and useful summary one. In mortgage lending they call this concept the "5 C's" of credit: character, capital, capacity, conditions and collateral. Character speaks to credit history. The credit scores are driven by "tradeline" payment history but lenders can independently verify that information- you disclose all your liabilities at application anyway, they can independently verify them, their history, and base an underwriting decison and price accordingly. Credit scores are not necessary for competition in the loan market - lending has existed as long as commerce has. They do facilite faster lending descisons and reduce the processing and underwriting workload for lenders. Historically (at least in America) banks absolutely have not been willing to lend to all comers who could repay and credit scores have probably served to equalize access to credit for more people in a way that wouldn't have happened without them, but they aren't strictly necessary to make or get a loan or even have a market for them. It's just more work for the lenders.