Credit scoring is a method used by lenders to evaluate the creditworthiness of an individual or business seeking to borrow money. It involves analyzing the borrower's financial history, including their credit report and score, payment history, debt-to-income ratio, and other relevant factors, to determine the likelihood that they will repay a loan on time. Credit scoring helps lenders make more informed decisions about whether to approve a loan application, and at what interest rate. It allows them to assess the level of risk associated with a potential borrower and helps to ensure responsible lending practices. Overall, credit scoring plays a crucial role in the financial industry by helping to streamline the loan approval process, reduce the risk of default, and promote fair and consistent lending practices.