Banks and credit agencies have started coming up with creative ways of assessing risk of “unbanked” or “credit invisible” people.
They’re calling it “alternative data,” which really just means data that isn’t normally used in a credit report. That could be things like proof of rental payments, or mobile phone bill payments, or cable TV payments. Anything people can use to prove that they’ve paid bills on time certainly helps.
But it doesn’t stop there. In a report on alternative data, Experian proposed also using things like a person’s educational history, occupation, and even social media activity. “Yelp reviews, Foursquare check-ins and online rankings and ratings can all shed light on a business’s health, growth and stability,” the report explains.
Source: Forms From the Future: your social media activity and your credit score.