Blockchain Is Revolutionizing The Credit Industry

Following the Equifax hack, blockchain has emerged as the best alternative that can safeguard data and personal information as well as offer access to most consumers who do not get credit from mainstream agencies.

The Equifax breach demonstrated exposed the credit system for its lack of transparency to the disadvantage of the consumer because different details are given to the lender to give different ratings on the consumer.

What will blockchain change?

Adopting a blockchain format for credit purposes is expected to allow the consumer to compile information about their credits history and then submitting them to the lender unlike in the current dispensation where creditors have the upper hand regarding consumers’ credit information.

Blockchains are equally likely to reduce identity theft because there won’t be a centralized system that can get hacked. Holding of Credit data won’t be in a central system, and as such, each consumer will have control over their credit information.

Similarly, blockchain is expected to reduce the associated costs of conventional information and data verification. Considering the credit agencies don’t share credit history data of the consumer with each other it takes a lot of time getting reports from each before getting the full report for approval to get credit.

Blockchains are likely to reduce the cost and time taken collating all this information from different agencies as the consumer will be the one responsible for compiling data and then submitting to the lender.  

Who is already using Blockchain?

Close to two billion people across the globe either don?t have a bank account or they cannot access conventional financial and credit institutions.

The concept is already working in enterprises such as BanQu which are currently offering credit access to people who are not in a banking system or cannot get aces to one.  Equally blockchain firms like Swapy Network are working on embracing blockchain in helping consumers get general credit access.

Similarly, Moeda has taken the blockchain approach for the consumers and entrepreneurs who find themselves at a disadvantage to traditional lenders. The application of blockchain tech is expected to rationalize the lending process to do away with the obstacles that smaller enterprises face in accessing credit.

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