Feb 23, 2013 Sean Albert
Traditionally, if lenders were approached by a consumer for a boost in funds, the company would look at the individual's credit score. If the would-be borrower had a dismal score or simply no credit history, many businesses would send them on their way, unwilling to take the risk.
However, many alternative lenders are increasingly looking at new forms of credit scores. For example, numerous companies are taking into account a person's Payment Reporting Builds Credit (PRBC) score, which is compiled when utilities companies provide credit bureaus with records of steady payment on various accounts.
According to The Australian, taking this type of score into account is becoming more common for lenders when deciding to offer loans. A more comprehensive score is being sought out by Australian companies, the news provider noted, as this can give a better indication that an individual has the resources to pay back a loaned sum.
Citing information from traditional lending entity Dun & Bradstreet, the newspaper reported that adding more alternative data to a person's credit history can boost loan approvals by as much as 27 percent and lower the default rate significantly.