By way of background, traditional consumer lenders have historically relied heavily upon basic financial and demographic data (gender, zip code, age, etc.) as well asFair Isaac Corporation (FICO) scores. While not horrible across the board, it’s folly to think that these basic calculations always led to intelligent credit decisions. (Exhibit A: the recent subprime mortgage crisis.)
In the words of personal-finance expert Dan Macklin, “A growing number of lenders think that a person’s FICO score doesn’t tell the whole story and can even be misleading under certain circumstances. It’s become clear that there are more accurate ways to measure financial wherewithal—no FICO score required.”
For more on this story visit the following link: How Big Data Is Changing Conventional Lending?
Source: Huffington Post