No Credit History? No Problem. New Research Suggests Shopping Data Works as a Proxy for Creditworthiness

No credit history? No problem. New research suggests shopping data works as a proxy for creditworthiness

If you didn't know much about someone, would you lend them a whole lot of money? Probably not—and banks are the same way. That's why people with no credit history often have trouble getting loans. Banks and credit bureaus look at people's past borrowing to predict how likely they are to repay. And when there's no history, they tend to assume the worst.

No credit history? No problem − new research suggests shopping data works as a proxy for creditworthiness

No credit history? That need not be a problem for first-time borrowing. AP Photo/Mark HumphreyIf you didn’t know much about someone, would you lend them a whole lot of money? Probably not – and banks are the same way. That’s why people with no credit history often have trouble getting loans. Banks and credit bureaus look at people’s past borrowing to predict how likely they are to repay. And when there’s no history, they tend to assume the worst…

Can Shopping Data Unlock Credit for First Timers?

Key takeaways: Shopping data can double credit approvals for first-time borrowers. Patterns like sale buys and card use signal low default risk. Retailers and banks can partner, with consumer consent. New models boost access while keeping default rates low. Can Shopping Data Improve Loan Approvals? Many people lack credit history and face big hurdles. Banks and credit bureaus rely on past loans to judge risk. Yet newcomers often have no records…