February 21, 2016
The FICO credit score has been used to determine how financially responsible and trustworthy a consumer is. The credit number has been critical to the home rental and loan application processes, especially after the financial crisis. In case a consumer doesn’t have a sufficiently high credit score (FICO), landlords and banks will most likely reject them.
There are an estimated 53 million Americans without a credit score and many do not have a high enough credit score to get a loan. Many of them are recent graduates, migrants and young adults who prefer to avoid using credit, and veterans who have been out of the country.
Multiple credit building companies have tried to build solutions that help consumers in improving their credit score, but in most cases the primary evaluation is done based on FICO. However, things have been changing rapidly and with the rapid growth and disruption that FinTech brings to industries, credit scoring hasn’t been left behind.
The following companies have been taking a different approach to trustworthiness evaluation in order to ‘humanize’ the cruel FICO and have developed their own algorithms and tools to make consumers’ lives better.
eCredable gives consumers a letter grade (A through F) based on their payment information that the company collects from the landlord, utility provider, insurance company or other vendors to verify timely payments. The report is called an AMP credit rating (where AMP stands for "all my payments"), and eCredable will share it with a potential landlord or lender with the consumer's permission.
Happy Mango applies an aggregation technology to pull in financial information with the user's permission and help lenders make credit assessments based on information not found in a credit report.
Upscale provides the financial services industry with a network based finance suite that is easy and lightweight, provides external data and internal data for a training machine, a machine that will evolve and templatize the rules and validates it every day against a self-developed hypothesis.
SwissMetrics is a dynamic startup from Switzerland that is on a mission to enhance the way companies monitor their credit risk. As finance professionals, they have developed a SaaS platform with the aim of promoting smarter collaboration within companies to work for a common goal – saving money through risk minimization.
Aire uses data provided by users to develop an alternative credit score for those who don't have a traditional credit score. In case the company can't validate the data, the score will not be guaranteed.
SavvyMoney, Inc. offers SavvyMoney, an information program that provides users with a credit report card and credit risk score, along with special personalized loan and other financial recommendations.
Clear Score Technology Ltd. provides credit reports and scores. Its credit report and score cover various financial accounts, such as credit cards, loans, and mortgages.
Cignifi has developed an analytic platform to deliver credit and marketing scores for consumers using mobile phone behavior data. Cignifi’s big data engine enables mobile network operators and their banking and insurance partners to identify qualified leads for savings, credit cards, insurance, personal loans and more from among tens of millions of pre-pay customers.
SharedLending is a platform where people create their unique CORE Profiles. Their algorithm has no connection or correlation with FICO. Their model analyzes responses to 5 human characteristics: Productivity, Resilience, Finance, Health and Education.
Neener is the FICO for financial personality and behavior analysis.
ModernLend is an online lender that uses alternative metrics to identify and lend to international citizens who cannot access financial products due to lack of SSN or FICO score. The company's first product is the ModernLend Debit Card that helps customers build credit histories in 6 months and access benefits from 300,000 vendors nationwide, all without requiring an SSN.