The use of on-chain behavioral data for credit scoring by institutions sparks ethical debates. Proponents argue it enhances accuracy, leveraging transparent blockchain records to assess financial habits. However, critics highlight privacy risks, as sensitive transaction histories are exposed without explicit consent. Such data may also perpetuate biases, unfairly penalizing individuals based on uncontextualized actions. The lack of regulatory oversight exacerbates concerns, potentially enabling exploitation or discrimination. Balancing innovation with ethical safeguards is crucial to ensure fair and privacy-respecting credit systems.