Visual Capitalist is out with their 2nd infographic demonstrating how tech is changing the credit landscape.

It highlights two major changes in the credit scoring system which are being driven by "Big Data." These tweaks increase the predictive ability of whether a consumer's will repay a loan. Here they are:

1) Trended data

2) Alternative data

Questions:

• How is trended data and alternative data different from the current credit scoring system?
• Analyze three of the alternative data sources listed and describe why this information could be helpful in determining whether someone can repay their debts. 
• What do you think the impact will be if lenders have better information about consumers before making a loan to them?

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Ever wonder what the average credit score is for 18-24 year olds? Check out this NGPF Question of the Day to get the answer. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.