FIRST TIME BORROWERS WITH NO CREDIT HISTORY?
YOU ARE TRACKED BY YOUR NON-TRADITIONAL DATA.
The digital footprints you leave while your routine work on the computer, social media interactions, and -likewise can help you qualify for a loan application you might have made with banks.
Have doubts? Let us make it clear.
For the lending companies, there are a few things they would like to verify before they give their money in the form of investments. They would like to know who you are and whether you are a reliable person or not. And when they say a reliable person, they mean someone whom they can trust, whom they can lend their money to and expect it to be repaid by them within the maturity period.
People residing in small towns or young college graduates find it difficult to raise funds mostly because they do not have a sound credit history and banks would weigh them as a risky customer to fund.
To sort out all these situations faced by borrowers, lenders have started using an alternate method to screen a loan application over and above the traditional method of accessing – amount owned, payment history, credit mix, and past payment history. They use non-traditional data like data they leave behind while surfing online, making online shopping, online transactions, etc.
Some insights that affect the creditworthiness using the digital footprints are listed below. Let’s see how you get judged upon your digital footprints:
- 1. The very first time you enter a lender’s website, you are being tracked:
- a. If you jump directly to the sign-up page, you are considered as an applicant who is in need for money.
- b. If instead of typing your name, you copy it from somewhere else; you are put into a fraudulent bot.
- 2. Your post says you party frequently, lenders consider you spending more time partying than at work sidelining you as a highly risky borrower.
- 3. You are judged on the basis of your tags, posts, comments, friend lists, their behavior, lifestyle, and habits.
- 4. The lenders do not screen personal private messages, but will show them how frequently you use the word – Please” or ‘Kindly’ in your messages or chats, giving them insights that you are a kind of person who would apparently not pay back or pay back the money.
- 5. Be aware of your each comment, posts; frequently stalking or trolling someone unnecessarily can put you in a troublesome file for the loan you have applied.
- 6. Your close friend has a history of default and you have a frequent conversation with him; you are being constantly watched from behind and your credit history is going to affect a lot.
- 7. If your education background is Computer-Science, there are perks to it. Some lenders have a positive side on you considering you as there is a notion that you will pay back.
- 8. Not only your social platform; but even a simple text message of amount credit, cash transaction, transaction details from even your phone, is been taken into consideration.
- 9. Your posting habits like – misspelled words, grammatical errors or posts in capital letters brings out insights about your education and earning power of the applicant.
- 10. Your professional career is directly linked to your credit assessment. If you have a high volume of short-term jobs, or a random change in job type – it is derived that you are surely not a person of financial stability.
- 11. Tell your information to the lenders about how quickly you respond to your customers, solve their queries, doubts, and likewise.
- 12. Some lenders also consider an average credit score of your friend list, or people having similar characteristics as of yours and judge your credit score based on that.
And after knowing all these if you start energizing your social platform, activate frequent posting, commenting; this won’t help either. This will not give a good insight to the lenders – they would consider that you are trying to make a sudden spike in your activity just for the sake of your credit accessibility.
Hence, from now on, better be cautious before you make a friend on the social platform, or post on the platform; lenders are constantly trying to find your digital footprints to access your repayment capacity.