Your (Digital) Credit Score

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Your (Digital) Credit Score


Post by Jcolvin2 » Mon Oct 08, 2018 8:46 pm

The FDIC recently released a research paper discussing whether digital information given by customers in online purchases could be used to assist in the assessment of the creditworthiness of the customer:

Credit Score Using Digital Footprints

Some interesting tidbits, based on a review of the digital footprints left by more than 250,000 online purchasers in Germany:

"[C]ustomers coming from a price comparison website are almost half as likely to default as customers being directed to the website by search engine ads, consistent with marketing research documenting the importance of personality traits for impulse shopping."

"[O]rders from mobile phones (default rate 2.14%) are three times as likely to default as orders from desktops (default rate 0.74%) and two-and-a-half times as likely to default as orders from tablets (default rate 0.91%). Orders from the Android operating systems (default rate 1.79%) are almost twice as likely to default as orders from iOS systems (1.07%) – consistent with the idea that consumers purchasing an iPhone are usually more affluent than consumers purchasing other smartphones. As expected, customers from a premium internet service (T-online, a service that mainly sells to affluent customers at higher prices but with better service) are significantly less likely to default (0.51% versus the unconditional average of 0.94%). Customers from shrinking platforms like Hotmail (an old Microsoft service) and Yahoo exhibit default rates of 1.45% and 1.96%, almost twice the unconditional average."

"There are only few customers who make typing mistakes while inputting their email addresses (roughly 1% of all orders), but these customers are much more likely to default (5.09% versus the unconditional mean of 0.94%). Customers with numbers in their email-addresses default more frequently, which is plausible given that fraud cases also have a higher incidence of numbers in their email address. Customers who use only lower case when typing their name and shipping address are more than twice as likely to default as those writing names and addresses with first capital letters. Interestingly, we find that eponymous customers who use their first and/or last name in their email address are less likely to default."

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