They address the problem of moral hazard that is the behavioral unwillingness of a consumer to repay. Credit bureaus support borrower discipline since a failure to repay a creditor may result in penalties imposed by other creditors. 3. They address the problem of information asymmetries, as borrowers and lenders may share the same information regarding risks and pricing.
Increased transparency will result in more informed credit decisions, which will ultimately increase the volume of credit. 4.