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posted by janrinok on Monday July 27 2015, @06:18PM   Printer-friendly
from the a-bit-of-a-gamble? dept.

Computers aren't just doing hard math problems and showing us cat videos. Increasingly, they judge our character. Maybe we should be grateful.

A company in Palo Alto, Calif., called Upstart has over the last 15 months lent $135 million to people with mostly negligible credit ratings. Typically, they are recent graduates without mortgages, car payments or credit card settlements.

Those are among the things that normally earn a good or bad credit score, but these people haven't been in the working world that long. So Upstart looks at their SAT scores, what colleges they attended, their majors and their grade-point averages. As much as job prospects, the company is assessing personality.

The idea, validated by data, is that people who did things like double-checking the homework or studying extra in case there was a pop quiz are thorough and likely to honor their debts.

http://bits.blogs.nytimes.com/2015/07/26/using-algorithms-to-determine-character/

[Other Companies Involved With Similar Programs]: ZestFinance , Workday


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  • (Score: 2) by vux984 on Monday July 27 2015, @09:37PM

    by vux984 (5045) on Monday July 27 2015, @09:37PM (#214556)

    By that logic anything other than paying by cash would result in debt.

    No, not really.
    Paying by bank card debit / visa debit the funds are directly withdrawn from your bank account cash balance; or pre-paid debit card balance. Its all real time, you don't leave the store until the merchant has their cash in the bank. So there is no debt.

    Paying by cheque is a bit messier. It -is- debt, but strictly speaking its private debt to the person you wrote the cheque to not the bank or other financial company. So they don't consider it debt. (No more than they consider a loan from your parents to be debt.) It's not debt between you and your bank because the bank has no liability -- even if you write a bad cheque; when they receive the cheque to clear it they simply deduct the funds from your account if they are there or bounce it if they are not. (Unless you have overdraft protection -- but that is separate and -is- credit.)

    If the recipient of a cheque you write clears it at another bank, and their bank extends them the funds in advance of the cheque clearing that is also credit, but its between the cheque receiver and their bank, and is separate from the cheque writer. In practice, being the recipient of bad cheques and not having the funds to repay them when they bounce results debt for the recipient to their bank; and probably also results in a hold being placed on your deposits to ensure they clear to prevent this debt from happening in the future. So the ability to withdraw cash from a deposited cheque before it clears is a form of credit; and its a 'priviledge' they only extend to people with good credit. (But again it all has nothing to do with the cheque writer.)

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