Using new elements when judging loan applications

Since the Great Recession began a few years ago, individuals and companies alike have been having trouble securing loans from major providers and banks. Many of these well-known lenders are erring on the side of caution, not taking any risks when it comes to the possibility of nonpayment.

However, this may greatly restrict the possibility of growth within the United States' fiscal landscape in the future. If companies cannot expand, put out new product lines and keep up with supply and demand responsibilities, the economy will likely stagnate. With this in mind, numerous business owners are turning to alternative finance companies for help.

Non-traditional lenders are now highly sought after by many Americans trying to make ends meet at home or in the office. One of the best perks about obtaining a loan from these companies is the fact that applicants are judged on numerous factors, not just the traditional credit score. One emerging trend is for lenders to use the Payment Reporting Builds Credit ranking system, which takes a strong history of repayment on utilities accounts, into consideration, among other economic pulse points. This can result in a more comprehensive picture of whether or not a firm would be worthwhile to loan to, so it's in a lender's best interest to adopt such standards.

That said, other innovative firms are taking some alternative factors to heart. For example, according to CNBC, some lenders are considering companies' ratings given by consumers to be a good judge of whether or not they'd be a worthwhile client. The source reported that some alternative firms are looking at comments and rankings on popular websites like Yelp for guidance.

It is generally up to the lender to decide what sort of standards the business uses to approve or deny loan applications, the news outlet said, but utilizing social media data and other alternative information sources is becoming much more widespread.