Choice of iOS or Android can predict credit-worthiness


In 2018, based on an analysis of 270,000 purchases between October 2015 and December 2016 on a German ecommerce site that sells furniture on credit, researchers at the National Bureau of Economic Research found that variables such as the type of device could be used to estimate the likelihood that a purchaser would default. The difference in rates of default between users of iOS and Android was about the same as the difference between a median FICO credit score and the 80th percentile of FICO scores. Among other variables associated with higher default rates: using cellphones instead of desktop computers; an address from an older email service such as Hotmail or Yahoo; incorrectly entered email addresses; and arrival from clicking on a targeted ad as compared to a price-comparison shopping site. The digital indicators equaled or exceeded the accuracy of traditional credit scores. However, widespread use could have a chilling effect on online user behaviour and freedom.
Writer: Louise Matsakis
Publication: Wired


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