Lots of People don’t have a credit score or any banking history: Around 1.5 billion people worldwide don’t have access to bank services. They’re called ‘unbanked’.
Hard to Get Loans: Even for those who use banks, less than half can actually get loans due to no history or low scores. Banks need a better way to decide who can borrow money.
How AI Could Make Things Better?
AI Credit Scoring would be a new way to figure out if someone can and will pay back a loan that would likely be turned down using our current approval system.
What AI Looks At: It checks things like how much money you make, your loan history, your spending, job experience, and even how you behave online. It’s pretty scary to think about everything we do online is being tracked nowadays.
What are some of the benefits: AI scoring uses tons of data to give a more personal and up-to-date credit score/risk assessment. This means more people who could pay back loans might get the chance to borrow money.
What are some of the benefits: AI scoring uses tons of data to give a more personal and up-to-date credit score/risk assessment. This means more people who could pay back loans might get the chance to borrow money.
Understanding AI Credit Scores
What’s an AI Credit Score? It’s a new way to judge if someone is likely to pay back a loan. It uses AI to look at lots of different information, not just the 3 C’s: Credit, Capital and Capacity.
Why it could be better: AI gives a fuller picture of someone’s money habits, so lenders can make smarter choices. In my opinion, lenders are slow to make any changes so this would take time to implement before they switch over completely.
AI’s Big Role in Credit Scoring
What Traditional Methods Miss: Old ways of scoring don’t always catch the full story of someone’s financial life.
AI’s Advantage: AI can handle tons of data, spot trends, and make good guesses about whether someone will pay back a loan. It’s especially helpful for people who are new to borrowing or don’t have much credit history.
Goal with AI Credit Scoring: Helping More People Get Loans That Can Pay Them Back As Agreed
AI credit scoring is a game-changer in the world of banking and lending. It uses smart technology to look at a whole bunch of information about people who want to borrow money. This means lenders could make better decisions about loans, and more people might get the chance to borrow money, especially those who haven’t had much chance before.
Until we change to the new way, feel free to reach out to us for any guidance on credit scoring or credit reporting questions you have. We are always happy to help any way we can!
