Why do companies use scoring systems?

Some credit reporting companies use scoring systems to help creditors evaluate your creditworthiness. Credit reporting companies instruct lenders to identify credit related factors such as income level, length of employment and payment history, and then assign point values to each characteristic. By comparing this information to the patterns in hundreds of thousands of past credit reports, the score identifies your level of future credit risk. The Federal Trade Commission has a rule that if a credit reporting company uses a scoring system, it must provide you with your score and an explanation of how the score was determined.