We take for granted the process of receiving a credit score and the distribution of our credit history across banks and retailers, yet both are recent phenomena. We also assume that retailers' credit extensions are relatively simple. Pre-Civil War, most retail purchases were made in cash or with simple extended terms from a local grocer or retailer. Credit amounts or ratings were held by an single institutions and only extended to those that were know.
As cities grew and consumers, this was not a workable solution. Even in a city, there began sharing arrangements regarding customers' credit histories. Runners would move from store to store to gain information on a new customer. The transaction costs were high, but not knowing the consumer was costly.
Suppliers placed pressure on retailers to pay their bills so retailers had to better know who they were extrending credit to. Lists were made, and the process started to be centralized through local credit bureaus. As more credit was extended, there was a need for more credit professionals and further automation to track and rate consumers. This was furthered through the use of comutuers and the ascent of credit cards.
There is not much to apply to trading with this history of credit information. Still, Creditworthy: A History of Consumer Surveillance and Financial Identity in America by Josh Lauer is a fascinating history that makes you think about the fundamentals of credit information and ratings.
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