“Big Data” Creates “Super Credit Score” Risk Software

Big Data Creates Super Credit Score Risk Software

English: Risk management sub processes (Photo credit: Wikipedia)

Big Data” Creates “Super Credit Score” Risk Software

Cutting edge money lenders around the world are interested in more than the financial data included in your traditional Credit Reporting Agency reports.  More and more they are starting to pry into your social circles, interests, hobbies, friends and associates.  Some of the new applications require access to Facebook, Twitter, Gmail, Yahoo, Windows Live and other social accounts.  You may find that you need to dump friends with low credit scores in favor of those who can impress the big data computers.  One lender’s risk software, “Zestdata” has a system sending 70,000 signals into 10 separate underwriting models.

Your “Super Credit Score” knows your friend’s financial miscues

International bankers have already built business models based on this kind of risk software. Lenddo, a microlender from Hong Kong proudly proclaims that they are “the first credit scoring service that uses your online social network to assess your credit.”  If you don’t have at least 3 high scoring connections in your network don’t bother applying.  Their philosophy is that “all data is credit data.”  Even more horrifying is that they can notify your connections of your successes and failures to keep up your payments.  If you are willing to surrender your privacy to that degree you deserve what you get.  Indirectly your failure to repay could damage your friend’s rating.  Questions of privacy and free will inevitably arise.

Use of “Super Credit Score” by Domestic Banks Soon

Foreign banks are leading the way with this trend but the “Super Credit Score” enabled by big data is already in the United States.  Perhaps impressed by how finely data has been ground by foreign money lenders there is a silicon valley start up in California called LendUp that provides short term loans with high interest rates.  Your social data better match up with your application or you will be refused.  Financed by venture capital, this service lends only to California residents for now.  Once the borrower proves himself with his first small loan he will be eligible for larger loans at better interest rates.  LendUp is still in the bush leagues compared to where foreign lenders have already gone.

Far Frontier of “Super Data”

A London based money lender named Wonga actually factors in the time of day at which you enter their site.  They also factor in “the way a candidate clicks” (don’t ask…I don’t know what they mean by this.)    Kreditech from Germany boasts that it uses 8,000 different factors including locations, likes, posts, movement, duration on the webpage, e-commerce shopping, apps….get the picture?  Are your ready for your own “Super Credit Score?”

Safaricom analyzes cell phone top offs, mobile money, length of calls, time of day and location.  Movenbank has an agreement with Klout to use your Klout score in its algorithms.

This is all so frightening but as of right now no one has to consent to enter these systems. A “Super Credit Score” is not kept without the consent of the applicant. I’m sure there will be some use of the “Super Credit Score” creeping into the mainstream with the erosion of privacy that inevitably follows such advances.

Proponents defend these systems as offering hope for loans to those who are currently unbankable.  These are the “credit invisibles” as the Wall Street Journal recently referred to them.  Lenders hungry for new business try to refine risk measurement into more sophisticated models

“Big Data” Creates “Super Credit Score” Risk Software is here to stay.
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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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