Weekly Credit Score Shifts
November 15th, 2024
The graph below illustrates BCB's credit score distribution by score band over the last three weeks.
Approximately 4.3% of on-chain wallet scores change week over week. This relatively small shift in credit scores is within expectations and aligns with movements in traditional finance.
High short-term volatility in credit scores is not ideal, as it suggests weak models or poor data quality.
However, it is expected that wallet credit scores will change significantly (increase or decrease) over time as wallet behaviors are recorded and feeds into their scores. See below.
Score Change After Time Elapsed
The graph below illustrates that approximately 25% of the population's scores changed significantly (by 10 points or more) after three months, indicating a considerable shift in their risk profiles based on recent transactional behavior.
For this reason, it is important for lenders and businesses on-chain to use fresh data when assessing credit or any other type of risk.
It is encouraging that the observed shifts in the on-chain population are similar to those in traditional finance, as it suggests that people's behaviors are consistent across these domains.