I don't read much into it for a couple of reasons: first if they have a 20% acceptance rate, if we just compare red delicious apples to granny smith ones, that would equate to a FICO 08 score of around 792. Yes that's simplistic as FICO ain't the end all and be all of any UW decision, but I don't see lenders running towards the exits just based on that data alone on the thought that their default rates are lower. Also there's no real guaruntee given the likely self-selected people who have applied, that this is a valid cross-section of humanity.
As for long term, look at P2P: once it was proven, not a month ago Goldman Sachs launched their own platform... and it was known that on the earlier P2P sites there were some lenders on there fully funding loans if they met their criteria.
The interesting question to me is whether FICO and the gang of 3 adopt similar scoring mechanisms in their own general market algorithms. They do have some secondary tier products already doing similar things (least from what I've seen from Experian) though it's still somewhat in it's infancy.
I doubt regulators in the US will allow social media/online big data stats for anything beyond marketting. It's quite valauble there. For credit decisioning there are all sorts of issues and potential conflicts with current law using the data in the way credit specific CRA data is now used.
@cashnocredit wrote:I doubt regulators in the US will allow social media/online big data stats for anything beyond marketting. It's quite valauble there. For credit decisioning there are all sorts of issues and potential conflicts with current law using the data in the way credit specific CRA data is now used.
It's already being used in some places in the government and military for things that go well beyond marketing heh; interesting point regarding regulation of the financia; industry though: could it be considered the new redlining if something like this went into effect?