Credia Layer: The Future Of Credit Scoring?
Traditional credit scoring systems have existed since the 1980's and over the years not much has changed from the original model. While the system currently in place has been useful for a long time, it hasn't been perfect. A lot of the time, folks who have turned their financial situations around with prudent money habits and investing still have trouble building up a reliable credit score.
This is due to the lag in the manner in which the information that is required for the calculation of the score is sourced.
That something or some way of doing something is institutionalized or has become the norm, doesn’t always mean it is the best. In fact, if we look through history, the sheer amount of inventions created in the last century alone is enough proof that popular methods of engaging with nature and one another, are not always the most ideal.
Ironically however, using same history as a guide, we can almost certainly see a clear pattern of resistance to new, improved ways of going about our daily activities. While the majority of inventions were borne out of necessity on the part of the inventor, not everyone agreed initially. The Wright brothers were called mad, Electricity was referred to as witchcraft and the Internet, which today affects virtually every aspect of our daily lives positively, was initially kicked against in numerous ways.
Change is inevitable. However, as conclusive as that statement sounds, it’s a matter of necessity to consider another relative idea: Most people are resistant to change. It might sound wierd that a people as intelligent and biologically complex as humans, would agree on the inevitability of change but resist it in the same breath. That topic alas, is one this writer will leave for psychologists to argue about and eventually come up with a tangible reason why.
Having examined the above, we can logically say that most new and emerging technologies in the current era of rapid technological advancement will most likely be met with skepticism, even if it only exists in the early stages. We will take a broad look at Credia Layer in subsequent paragraphs and see just how, this new technology is potentially going to shake up the financial industry and more specifically, the credit scoring system.
What Is Credia Layer?
Credia Layer is the name of a player in the still yet to be mainstream web3 ecosystem, using the capabilities of the blockchain, relying on it’s ability to maintain a digital ledger of immutable, untamperable records to make credit scoring faster and more efficient.
Credia Layer actually has two major offerings:
- Mobile computing power sharing,
- Credit score calculation.
This article will focus more on the second, but the first integrates a system that unites buyers and sellers of mobile computing power, using a trustless system that rewards sellers based on the amount and quality of power they make available to the network.
What Is Wrong With The Current Credit Score Calculation System?
Credit calculation is currently plagued by a couple of issues:
Credit scores don’t always accurately reflect a person’s financial situation per time, Credit scores are usually useful only within specific geographical locations, Too much personal information, even information not necessary for the calculation of credit scores is usually demanded.
This, coupled with the centralization of data, could expose the data to mishandling and privacy breaches which could compromise user privacy.
Combined, these factors make the traditional system too undesirable for users concerned with privacy, ease of credit accessibility and efficiency of service.
What Is Credia Layer Doing Differently?
With a robust combination of DePIN: to track financial behaviour specifically, and an AI powered system that evolves to get better and more effective at analyzing data sets, Credia Layer is proposing a credit scoring system that is geographically universal, accurate on a per time basis, decentralized, secure and one that prioritizes user privacy. It also offers a straightforward and transparent credit score improvement system that prepares tailored-for-you solutions to low credit scores.