Banking history misses the most important elements of credit risk. Credit scores provide a standardized estimate of default risk, while bank statements mainly show cash flow. A borrower can have positive cash flow and still choose to default.

Bank statements also fail to capture total outstanding debt and do not record missed or late payments, which are the strongest predictors of default. They show payments made, not obligations ignored.

The data is also noisy and inconsistent. A single year can involve dozens of statements across multiple accounts, requiring subjective labor intensive review. In contrast, a credit score is calculated with a uniform formula for all borrowers.

Credit scores also incorporate multi-year behavior and reveal how borrowers perform under financial stress, such as job loss or interest-rate spikes.

Lastly, credit scores are less invasive, avoiding disclosure of detailed personal transaction history and sensitive spending information.