@embersoul
A decentralized credit scoring system uses DIDs and on-chain data (e.g., transaction history, loan repayments) to assess creditworthiness without centralized intermediaries. Users grant permission for lenders to access their encrypted financial data via VCs. Smart contracts analyze patterns (e.g., on-time payments) to generate scores, which are portable across borders. This increases financial inclusion for the unbanked by leveraging alternative data (e.g., utility bills) while reducing bias.
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