In the digital age, everyone is buying, selling, creating relationships and carrying out a big part of their life online. But did you know that if you want money from your bank through loans, then the decision is based on your Cibil score and that itself is dependent on what you have done over the past, previously focussed just on your money life, but increasingly entering the rest of it too – in short, you life is laid bare to judge how credit-worthy you are and whether a bank should lend you any money at all. Your future well-being is definitely on the line and you have to be more than careful online, because YOU ARE BEING WATCHED 24/7, even if it is by a machine! Banks are updating themselves in understanding that there is so much more to people than just their past repayment history. They are also looking at ways to predict an individual’s creditworthiness from non-quantitative data now. Check out how:
1. Social media. Do not be surprised; your Facebook, Linkedin and Twitter accounts can help a bank decide whether you are a good candidate to lend to or not. Social media accounts can be used to judge a person’s personality traits. Social media can also indicate what you are buying, where you holiday (spending patterns) and what you talk about and what interests you. All this data is used to reach the alternative score.
2. What kind of friends you hang out with. Banks are using new approaches that assess whether you are a trustworthy person or not (without looking at the credit history) and they will try and judge this by who you hang out with. This is based on the assumption that if you are connected with somebody you are likely to share some or more characteristics; there has to be some common link. A look at your friend-list can help a bank decide whether you are a worthy candidate, the idea is as the saying goes: “birds of a feather flock together”. If your network has mostly dependable people you are likely to be dependable and vice versa.
3. Financial discipline. Be it the maintenance of your savings account, regularity in utility bill payments, spending patterns on online shopping and E-commerce websites and repayment behavior when making small ticket sized purchases (phones, digital products) on EMI, every detail is neatly categorised and goes a long way in determining how good a money person your really are.
Hero or villain? Believe it or not there is pattern linking the language usage to chances of loan default too! So, choose your friends well make good financial decisions; the good news is borrowing is now going to be easier.
Previously a single payment default could end your loan dreams, but things have changed. Now, the idea is to delve deeper and identify if it’s a one off case or a pattern. For the right person, this new ‘intrusive’ approach is welcome, for the rest, it is a wake up call!
