Describe what makes your work innovative.
Credit has existed for 5,000 years. Long before we had money, agrarian societies extended credit to each other so that people could satisfy their needs. Contrary to belief, these agreements were not usually built on bartering, just awareness. It has only been in the past 70 years (since the Diner’s Club Card was created in the 1950s) that trust in people has been measured by formulas, not understanding.
Decisions based on FICO use inductive reasoning – there is no time for further inquiry, so we assume that the past predicts the future by relying solely on credit scores. But credit is a lagging indicator – it can be months old. Less than 20% of subprime lenders even verify income and we know how that ends. (Remember the subprime mortgage crisis?) Decisions based on character use real time information – we have read-only access to a
client’s bank account so we can see what is happening now and we can confirm their financial picture (which we review 100% of the time). And by taking the time to understand not only what happened in the past, but what the client is hoping for in the future, we understand more.