The Evolution of Credit People in Financial History

From Barter to Blockchain: The Origins of Credit

Long before the invention of money, humans relied on barter systems to exchange goods and services. But barter had its limitations—what if you had goats but needed wheat, and the wheat farmer didn’t want goats? This inefficiency led to the birth of credit.

Early Credit Systems in Ancient Civilizations

In Mesopotamia around 3000 BCE, clay tablets were used to record debts. These early "credit people" were often merchants or temple officials who extended loans with interest. The Code of Hammurabi (1754 BCE) even formalized lending rules, capping interest rates to prevent exploitation.

Similarly, in ancient China, promissory notes known as feiqian ("flying money") allowed merchants to avoid transporting heavy coins. These innovations laid the groundwork for modern banking.

The Rise of Modern Banking and Credit Scores

Fast-forward to medieval Europe, where Italian bankers like the Medici family pioneered double-entry bookkeeping. This system made it easier to track who owed what, transforming credit into a measurable asset.

The Birth of Credit Bureaus

The 19th century saw the rise of credit reporting agencies. In the U.S., firms like Dun & Bradstreet began collecting data on businesses' payment histories. By the 1950s, the FICO score was introduced, quantifying an individual’s creditworthiness with a single number.

How Credit Scores Changed Everything

• Access to Loans: A high score meant lower interest rates.
• Social Mobility: Credit became a ladder to homeownership and entrepreneurship.
• Discrimination Risks: Critics argued biases in scoring perpetuated inequality.

The Digital Revolution: Fintech and Beyond

The 21st century brought seismic shifts. Fintech companies like PayPal, Square, and Ant Group leveraged big data to assess credit risk in real time—often without traditional credit scores.

Buy Now, Pay Later (BNPL) and the New Credit Culture

BNPL services (e.g., Afterpay, Klarna) exploded during the COVID-19 pandemic, especially among millennials and Gen Z. These platforms offer instant, interest-free credit, but critics warn of debt traps.

Cryptocurrency and Decentralized Credit

Blockchain technology introduced decentralized finance (DeFi), where smart contracts replace banks. Platforms like Aave allow users to lend/borrow crypto without intermediaries. Yet, volatility and fraud remain challenges.

The Future: AI, Biometrics, and Ethical Dilemmas

Artificial intelligence now predicts creditworthiness using non-traditional data (e.g., social media activity, rent payments). China’s Sesame Credit system even incorporates behavioral metrics, raising privacy concerns.

Will Cashless Societies Eliminate Credit People?

As central bank digital currencies (CBDCs) gain traction, the line between money and credit blurs. Some predict a future where your digital footprint is your credit score.

The Ethical Frontier

• Algorithmic Bias: Can AI avoid reinforcing historical inequalities?
• Data Privacy: Who owns your financial identity?
• Financial Inclusion: How to serve the unbanked without exploitation?

From clay tablets to AI-driven scores, the evolution of credit people reflects humanity’s endless quest to trust—and profit from—each other’s promises. The next chapter? Perhaps a world where credit isn’t just a number, but a living, breathing part of our digital selves.