The way we currently measure potential borrowers’ and other customers’ creditworthiness is broken. The credit scores that have become the gold standard are narrow, opaque, and easily manipulated measures that reward financial risk-taking and ignore responsible behaviors. It seems like those who don’t borrow are punished.
Is there a better way to measure creditworthiness? It starts with using data that can provide a broader picture of borrowers’ financial behavior and responsibility. Then it’s all about building alternative scoring models that look at more than just how much borrowers have borrowed in the past.
This whitepaper discusses: