Many companies that give a loan typically rely only on the information they gather from financial institutions. However, according to research by Creditinfo, now more and more personal data will influence decision-making.
What Will Determine Whether or Not You Will Get A Loan
A recent conference “Scoring Kitchen” by Creditinfo, which rates the creditworthiness of companies and individuals in more than 50 countries, addressed what is new in the scoring process.
If a person consents, institutions will soon examine more than just the repayment of past loans. They are currently looking to investing personal information you probably did not think necessary for a loan.
- What model of phone you have
- Whether you actively use mobile internet
- If you often miss calls.
- Playing a real-time game whose outcome will determine whether you are creditworthy.
For example, a study was done together with a telco company on how people’s financial reliability relates to their everyday behaviour. Analysis of the data reveals that how long people use one telecom operator’s services shows which ones are more trustworthy.
The longer someone uses the same telco’s services, the more financially reliable their loan-payment history is too. And on the contrary, customers who frequently change operators generally demonstrate a higher level of riskiness.
Those without 4G may not get a loan
Creditinfo analyst Allan Anyona notes that less financially reliable individuals tend to have more modest internet plans. The same people rush to connect as quickly as possible to free Wi-Fi networks at home and elsewhere. (Reducing their creditworthiness)
Also, the more advanced the network connection a potential customer’s phone supports, the greater their creditworthiness. So, customers using phones that support 4G network requirements are more likely to get a loan than those whose phones only work on a 2G network.
Missed calls Point to a frequent debtor
In this case, people were divided into different categories. It turns out the most financially reliable are those that frequently answer calls. The riskiest customers, meanwhile, are among the people who “miss” calls more often than others.
“We assume that people experiencing financial difficulties avoid answering calls as they do not want to talk with creditors. Some could be escaping relatives to whom they may also be in debt.” Creditinfo Group analyst explains.
Debtors are also looking into how often a customer tops up their mobile wallet limit. Thus the bigger their income, the higher their credit rating will be.
Games show how you will behave with real money
The final step may include games. A future customer may answer a quiz that takes 5-7 minutes. Consisting of a series of questions, like: how would you use an unexpected gift of KES 20,000. Would you spend it on entertainment or save it?
Studies show that the customers who meet their financial obligations most responsibly tend to choose the answer ‘I would save it’ in the game. However, the riskiest customers more often choose ‘I would spend it on entertainment’.
“We realize that over time skilled players learn to choose those answer that creditors view more favourably. But in calculating an individual’s rating, we focus on dozens of other factors. For instance, their insurance history, repayment of earlier loans, payment of utility bills, and so on.” Aurimas Kačinskas notes.