"They wouldn't do this if they weren't helpful in modeling risk." This isn't necessarily true. A counterargument is that credit scores offer banks an easy way

"They wouldn't do this if they weren't helpful in modeling risk." This isn't necessarily true. A counterargument is that credit scores offer banks an easy way to outsource what often ends up being a very contentious, politically-fraught process. Yet many analyses have found credit scores barely better than random dice -- the guy with the perfect credit score has a perfect credit score, until he doesn't and there is a wake of delinquency in his wake. It's also helpful to assess real world motivations. Extraordinarily few of the employees, including at the executive level, at a bank are legitimately concerned about the long term risk to the bank. Success is measured at the quarterly interval, and if you can justify your actions on a quantifiable measure -- even if it's a measure that has little predictive value -- then that's just perfect. The biggest indicator that someone is a credit risk is that they are maintaining or growing higher interest borrowing products, such as carrying a balance on a credit card. This is an absolute flashing light indication that someone is over-extended, yet the credit monitoring agencies would not bite the hand that feeds them by making too big of a deal about this. Indeed, gross over-borrowing is barely a blip on a credit report, because the people who lend the money ensure that it isn't. The world is absolutely awash in cheap cash and banks are desperate to lend it. In the wake of the subprime crisis everyone said "oh yes, of course there's a problem there it was the credit agency that was just marking these all wrong", but exactly the same thing is happening on personal credit reports. Of course it is, because the credit reporting agency is there to legitimize whatever the bank wants to do.