June 1, 2018
People seem to view their credit score as sacred; they’ve cultivated the number for years, check its progress every few months, and pray it doesn’t dip too low. If you want to own a home, qualify for a good home insurance rate, finance a new car, or even sign an apartment lease, there’s a good chance the score serves as a gatekeeper to these experiences.
This is because companies need to quantify client risk. And, credit scores have served as a solid predictive model for decades.
But a new study by the National Bureau of Economic Research has found that credit scores aren’t the only indicator of credit risk – your digital footprint might work as well. The research paper called On the Rise of FinTechs – Credit Scoring using Digital Footprints by Tobias Berg, Valentin Burg, Ana Gombovic, and Manju Puri tested a different approach: instead of the using credit bur ...