No Credit History? No Problem. Lenders Are Looking at Your Phone Data
- FICO, Equifax stike partnerships to expand access to loans
- ‘The way you use the phone is a proxy for the way you live’
Phone carriers and banks have gained confidence in using mobile data for lending after seeing startups show preliminary success with the method in the past few years.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Financial institutions, overcoming some initial trepidation about privacy, are increasingly gauging consumers’ creditworthiness by using phone-company data on mobile calling patterns and locations.
The practice is tantalizing for lenders because it could help them reach some of the 2 billion people who don’t have bank accounts. On the other hand, some of the phone data could open up the risk of being used to discriminate against potential borrowers.