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Credit Scoring

Credit Scoring
| Mark

How credit score is developed
Banks and moneylenders use credit scores to evaluate the eligibility of a person or business to obtain a loan. If eligible, the credit scoring would give the bank an understanding of the statistical risk to get their money paid back in full with interest. A low credit score means higher risk for the bank and vice versa. Traditionally, high credit scores are dependent on a good debt-to-belongings ratio, whereas high debt and a lack of estate as collateral would make a loan nearly impossible.

Times have changed. More metrosexual singles are living in shared accommodation, patchwork families, short-term jobs, fast-paced money earning and spending means less validity of traditional credit scoring. Furthermore, by now FICO as main provider for evaluating credit scores also lends its databases to cell phone providers, credit card companies and car dealerships. Even landlords and employers tap into credit scores to pre-select suitable candidates.

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As many aspects of our lives are happening online – it´s needless to say that novel methodologies and technical capabilities of online profiling or “dataveillance” must be enticing to any company dealing with or evaluating risk. Credit companies have long begun to use social platforms, such as Facebook or Twitter to gather insight about individual credibility (Cullerton 2013, 809).

By being tracked and traced via IPs, sites visited, real names, purchasing habits and so on over a certain period of time, the average person cannot even begin to imagine the amount and nature of information that is being gathered for the purpose of satisfying corporations in their need for knowing everything about potential or existing customers.

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