Why was the credit score invented?

Credit bureaus were invented in the 1800s. These bureaus collected information about consumers and businesses and helped lenders determine their creditworthiness.

But, these bureaus would decide someone’s creditworthiness based on subjective factors such as race, gender, ethnicity, and other individual identifiers. There was no standardized system put in place that could evaluate everyone using the same scale, no matter who they may be. To eliminate this bias, in 1956, engineer Bill Fair and mathematician Earl Isaac created the credit scoring system through their company Fair, Isaac and Co., which we know as the FICO® Score today. The scoring systems used today are modified versions of their initial model, which was first used in 1989.