Depending on how the risks of no/low score are weighted, and how wrong the inaccurate score is, a person may very well be more harmed by no score than by a low score. An inaccurate score might have to be massively off the mark to make a person worse off than no score at all. In the US for example, people with no credit history often get interest rates as high or higher than people with a relatively low credit score.
Of course from a privacy & data protection standpoint this doesn't make silently and secretly profiling customers okay. The solution is probably something more like a transparent opt-in system that has easy access for the customer to review their data and decide which pieces of it are included.
In the US, the balance is skewed a bit more towards secrecy, and it's not opt-in either. However you can with only modest difficulty check your credit score & information used to calculate it, and challenge parts of it that you think are inaccurate.
And we can only reason that they are not. As parent correctly implies, the purpose is risk reduction. A well implemented system will accept false positives, as we saw with the recent Amazon doorbell debacle.
No Score = higher risk, higher interest.
Incorrect low score = perceived higher risk, higher interest rate.
Depending on how the risks of no/low score are weighted, and how wrong the inaccurate score is, a person may very well be more harmed by no score than by a low score. An inaccurate score might have to be massively off the mark to make a person worse off than no score at all. In the US for example, people with no credit history often get interest rates as high or higher than people with a relatively low credit score.
Of course from a privacy & data protection standpoint this doesn't make silently and secretly profiling customers okay. The solution is probably something more like a transparent opt-in system that has easy access for the customer to review their data and decide which pieces of it are included.
In the US, the balance is skewed a bit more towards secrecy, and it's not opt-in either. However you can with only modest difficulty check your credit score & information used to calculate it, and challenge parts of it that you think are inaccurate.