Enhancing Consumers’ Financial Accessibility with Blockchain-Powered Credit Scoring: A Decentralized Method for Approval of Personal Loans

Abstract

Credit allowances for individuals who are seeking financial opportunities are vital for their growth and sustainability. Traditional credit scoring systems don’t allow them to get personal loans, as individuals lack collateral or have a limited financial history. This paper approaches a novel solution that makes use of blockchain technology to overcome these issues and improve individuals’ access to financing. The main benefits of blockchain technology are transparency, security, and decentralization, which have the potential to completely transform the credit rating system. We aim to develop a decentralized credit scoring system that incorporates a wide range of parameters by combining international standard scoring systems like FICO and EQUIFAX to make it more efficient. Moreover, the decentralized credit scoring system ensures data integrity and security, reducing the risk of fraud and manipulation in the credit scoring process.