Technological innovations such as credit scoring have dramatically changed credit markets since the 1980s. Through the credit scoring technology, financial institutions are able to better assess a person’s default risk and can give more people, among them riskier borrowers, access to credit.
Economist Michèle Tertilt explains how the “democratization of credit” leads to more people filing for bankruptcy. Her research has focused on bankruptcy systems in the United States and Europe, asking which system works better for people.
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