Again, credit scoring is usually a 100% automated mechanism for screening loan applicants on the basis of a pre-defined set of parameters while credit rating is a more subjective and manual method for determining a borrower’s ability to repay, based on a predetermined set of criteria.
This approach reflects the multifaceted role of banks including: their responsibilities in the payments system, their participation in the credit intermediation process, and their role as a source of liquidity and acting as a counterparty in financial transactions. I think we would all agree, though, that the current market turmoil points out how much the financial system has changed over the past several decades.