Creditworthiness and Challenging Traditions

Is there a relationship between how many text messages a person gets and their creditworthiness?  Are people who fill in applications in upper case letters more likely to be credit risks than those who don't?

The Value Of Credit Ratings

Some alternative lenders are asking these questions as they challenge the traditional value of consumer credit ratings. Although targeted to small business owners and geared towards business lending decisions, deliberating beyond the credit ratings status quo should have us all reflecting about the possible future impacts for consumers.

According to this article, click here, alternative finance companies are investing in technology to discover less conventional ways to measure creditworthiness. Some believe that a poor credit score is only one measure of a business owner and does not tell everything about a person's willingness to repay funding, stating that "willingness is a far different thing than an ability to repay…and far more complex to judge".

Other interesting studies, (U.S. based), reflect on using alternate data to contribute more accurately to credit reporting, such as:

  • "Give Credit Where Credit Is Due, Increasing Access to Affordable Mainstream Credit", click here,
  • "Building Credit Through Rent Reporting", click here,  and
  • "Alternative Data Helps Families Build Credit and Wealth", click here.

I wonder how long it will be before other fresh and bold ideas probe the value of credit ratings for Canadian consumers? And, how long it will be until we see Credit Rating Reform for Consumers?




Text: 905-945-5644
Formally the Ontario Association of Credit Counselling Services (OACCS)

Canadian Association of Credit Counselling Services

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Oakville, ON L6M 3E3

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