People with zero credit could not get a loan approved from a bank or a lending institution in the past. The reason being that they do not have a credit score that was a major or rather the main criterion for them to get their loan applications sanctioned. After the advent of Fintech in the early part of 1990, alternate credit scoring companies surfaced to offer credit for people with no credit history at all.

Traits of a top alternative credit scoring company

When it comes to applying for a loan for a first-time borrower, alternate credit scoring companies step in to determine whether the applicant’s loan should be approved or rejected. They use AI and ML techniques to get data about the applicant that would determine his/her creditworthiness when it comes to repayment of the loan.

There are several alternate credit scoring companies; however, a top alternate credit scoring company or companies in the region will have the following traits-

  1. They have the means to collect more alternate data.
  2. They have software and sophisticated systems to gather the information of the applicant when it comes to his/her utility bills, phone bills, and bank information.
  3. They have advanced systems to track data over a period of time to get an accurate alternate credit score for the applicant.
  4. They ensure that all the information of the applicant is secure and protected round-the-clock. They focus on high levels of data security.

Why are they better than credit bureaus?

When it comes to getting credit scores from credit bureaus, you will find they have limited options when it comes to information. Lenders can easily add utility and phone bills to the applicant’s credit scoring; however, they are just a small piece of the information. They often miss out on other essential insights about the applicant like the following-

  • Information pertaining to real estate.
  • Driving history.
  • Employment history.
  • Income over a duration of time.
  • Complete rental records and more.

Alternate credit-scoring done accurately can help people who were in the past not able to enter the credit system to get their loan applications sanctioned easily. Thanks to these alternate credit scoring companies, these individuals are able to get their first break when it comes to starting and establishing their credit score.

On the other hand, lenders are able to manage risks when it comes to tapping on the potential of the under banked sections of society. With the help of alternative credit scores, they are able to provide credit to this section of society and not incur losses with speculation.

A top alternate credit scoring company is a boon both to lenders and borrowers. One can get credit despite having zero or poor credit. Lenders can reach out to more people with their products. In this way, both attain the benefits. A good company ensures that accurate scores are issued as they have advanced systems and software to help them determine the right alternate credit scores faster with machine learning and artificial intelligence for their underwriting goals with success!


Categories: Business