Tag: credit scores

IMF report suggests credit scores could soon be based on web browsing history

The International Monetary Fund (IMF) has published the results of research conducted into how lenders are likely to be doing their business in the future, and what new information and personal data these companies plan to start asking from borrowers in order to determine their credit score.

The biggest takeaway is the seemingly inevitable shift from merely accessing credit information to also incorporating people’s online behavior into the process of deciding whether to lend them money necessary, for example, to buy a house.

Compared to the way the system now works in most countries – these changes, which are expected to be coming soon, look fairly invasive privacy-wise, and with no “vision” of proper safeguards. Banks and others will go as far as to access personal browsing and shopping history. This would be done by allowing automated systems, powered by algorithms, to harvest the data and turn it into credit reports.

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Your Credit Score Should Be Based on Your Web History, IMF Says

With more services than ever collecting your data, it’s easy to start asking why anyone should care about most of it. This is why. Because people start having ideas like this.

In a new blog post for the International Monetary Fund, four researchers presented their findings from a working paper that examines the current relationship between finance and tech as well as its potential future. Gazing into their crystal ball, the researchers see the possibility of using the data from your browsing, search, and purchase history to create a more accurate mechanism for determining the credit rating of an individual or business. They believe that this approach could result in greater lending to borrowers who would potentially be denied by traditional financial institutions.

At its heart, the paper is trying to wrestle with the dawning notion that the institutional banking system is facing a serious threat from tech companies like Google, Facebook, and Apple. The researchers identify two key areas in which this is true: Tech companies have greater access to soft-information, and messaging platforms can take the place of the physical locations that banks rely on for meeting with customers.

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