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Such information can increase usage of credit with this population and invite lenders to more efficiently assess their creditworthiness

Such information can increase usage of credit with this population and invite lenders to more efficiently assess their creditworthiness

While noting this danger, it really is worthwhile to pause and emphasize that new research on alternative data may in reality improve data availability and representation when it comes to an incredible number of customers that are credit hidden. 32 Lenders presently lack good tools to gauge these customers’ creditworthiness. Alternate information may lead to brand new data sources which are accurate, representative, and predictive.

Will the predictive relationship be ephemeral or stable with time?

Finally, it’s important to start thinking about perhaps the predictive potential for the information is probably be stable with time or ephemeral.