Key Terms

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On-Chain Credit Scoring Models

An on-chain credit scoring model is a method of evaluating the creditworthiness of individuals or organizations based on data stored on a blockchain. This can include information such as transaction history, financial records, and other relevant data that can be used to determine an individual or organization's creditworthiness. The on-chain model allows for real-time updates to credit scores based on new data and transactions, providing a more accurate and up-to-date representation of an individual or organization's creditworthiness. This model has the potential to revolutionize traditional credit scoring methods and provide greater transparency and accessibility for individuals and organizations seeking credit.

Consumer Credit Score Composability

Consumer credit score composability refers to the ability of a consumer's credit score to be used as collateral or a factor in determining the creditworthiness of other financial instruments or transactions. This can include things such as the use of a consumer's credit score to determine the terms of a loan or mortgage, or the use of a consumer's credit score as collateral for other financial instruments.

For example, a consumer with a high credit score may be able to use their credit score as collateral to secure a loan or mortgage with favorable terms, while a consumer with a lower credit score may have to offer more collateral or accept less favorable terms in order to secure a loan.

Consumer credit score composability can be an important factor in determining the creditworthiness of financial instruments and transactions, and is often used to reduce risk and uncertainty in financial markets. It allows for the creation of complex financial instruments that can be used to facilitate transactions and reduce risk, making it easier for parties to engage in financial transactions and investment.

Minimum Credit Eligibility Process in Tradfi

applicants must meet in order to be approved for a credit card. These requirements are designed to help the company determine an applicant's creditworthiness and ability to repay the credit card debt.

The minimum credit eligibility process typically includes the following steps:

1. Credit history: Credit card companies will typically check an applicant's credit history, including their credit score, credit report, and credit history. This information is used to assess the applicant's creditworthiness and ability to repay the credit card debt.

2. Income: Credit card companies will also typically look at an applicant's income and employment status. They will usually require that applicants have a stable source of income and be able to demonstrate that they can afford the credit card payments.

3. Age: most credit card companies require that applicants be at least 18 years of age or older to apply for a credit card.

4. Credit score: most credit card companies have a minimum credit score requirement for approval, usually around 600-640, but it can vary widely depending on the card issuer, type of card and other factors.

5. Credit Utilization: credit card companies will also check the credit utilization which is the amount of credit being used by the applicant as a percentage of their available credit. They may consider a high credit utilization as a risk factor.

Defi Credit Accounts (DCA)

Defi Credit Accounts are on-chain user accounts which act as an alternate to credit card. It allows users to borrow USDC without putting any collateral based on their on-chain credit score, which can further be used by the user like any other credit card as form of payments and borrowing.