Because you can't opt out. Lenders want to know about bad financial behaviors (indicators someone might not be trustworthy) to avoid a "market for lemons"[1] p

Because you can't opt out. Lenders want to know about bad financial behaviors (indicators someone might not be trustworthy) to avoid a "market for lemons"[1] problem. So, they contract with these rating agencies to provide extra information about potential borrowers. Where do these agencies get their data? Lenders in turn must report the credit lines they issue, usage, defaults, etc. So, when you are borrowing, the bank can know how you use (or abuse) credit, in addition to things that you provide such as earnings and savings. A couple of things to note. There is a difference between credit scores and credit reports[2]. Different types of credit lines may focus on different aspects of your credit report or use a different credit report [Only source I have for this was a forum I attended where a local bank had a loan officer talk about their side of issuing credit]. [1] https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons [2] https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-credit-report-and-a-credit-score-en-2069/ https://www.consumerfinance.gov/ask-cfpb/what-is-the-differe...