In the US, getting insurance, a bank loan, and many other benefits is affected by Credit Score.
Credit Scores typically fall between 300 and 850, and it is important to have it well balanced for institutions to pay attention to the user.
LedgerScore believes that banks should have an insight into users' crypto payments, as they could significantly tip the scales the right way.
LedgerScore is a growing company that allows banks to get insight into people’s crypto transactions, which can be of great benefit to their credit score.
When it first emerged, the crypto industry was rejected by the banks and traditional financial institutions, who did not take it seriously. Being skeptical of the idea of decentralization and having their power over money brought into question, they simply ignored the crypto industry, just as the regulators did. Many did not bother to try and regulate crypto for years and years to come, and now, when the crypto industry has grown to be quite a sizable force, this is rapidly beginning to change.
As for the banks, they are dealing with the flood of crypto in different ways. Some are trying to ban their use, such as Indian and Chinese central banks, while others are seeking to create their own CBDCs, or even find a way to work with the existing coins.
Regardless of the approach, most have recognized that the crypto industry can no longer be ignored, particularly over the last year, when the DeFi sector emerged and started to grow at a rapid pace. While the goal of the crypto sector is to cut off the banks from any type of transaction and completely get rid of them, some have decided that this might not be a realistic goal. The banks have been around for centuries, and they won’t give up easily. Such projects seek to combine the power of crypto with that of traditional banking, and enable new services, or improve the old ones.
One example is LedgerScore — a project that offers independent financial reporting for DeFi and traditional lending.
What Is LedgerScore and What Does It Do?
LedgerScore is a young company that offers a suite of financial products. Its goal is to make it easy for financial institutions to get an insight into any crypto user’s digital currency transactions, which would help the banks make a decision regarding issuing loans to such individuals.
As many are aware, the process for approving bank loans is long, tedious, and incredibly complex. The banks will do everything in their power to secure themselves, and that often means getting a complete understanding of what the borrower does, how much money they make, what they own, and what can be taken away from them if they happen to miss a payment.
With a lot of people now working with the crypto industry, massive amounts of money are being transferred every day, and LedgerScore believes that this should play a role in whether or not the user will receive credit. Therefore, it offers to help establish a personal or business crypto credit profile. In the US, this would, of course, also impact their credit score, which is important for more than just taking loans. Credit Score is also important for getting insurance, and even a job, and it needs to be carefully balanced in order for institutions of any kind to consider the user eligible to receive their services.
Crypto dealings could significantly affect this in the right way, and so they should not be ignored, and LedgerScore can make it happen.