To attract the best minds lurking in various parts of the world, a few world class universities like Harvard and MIT are encouraging students to join them. The fortunate ones (students) can concentrate on studies only; however, it can be terribly challenging for the ones that have to work to support themselves financially for higher education. Due to the absence of credit history, these international students are even unable to apply for credit cards for living.
Functioning of Self Score
Self Score is a brand new fintech startup with a mission to utilize machine learning for analyzing the credit worthiness of these students from abroad and to provide them with a credit card they can afford.
Even students from well-off families often fail to apply for a credit card for failing basic tests provided by money lenders. Furthermore, most of them do not even own a social security number.
According to the maker
The CEO Kalpesh Kapadia elaborately explained the metrics utilized by Self Score for analyzing the credit worthiness of individual students.
People who are new to credit lack a credit history and are invisible to the traditional banking system. The bureaus call them no-file or thin-file. So we’ve developed proprietary technology that measures an individual’s credit potential versus their credit history. Our Analytics-Based Credit Decisioning (ABCD) system takes into account Eligibility, Identity, Stability of Identity and Ability to Pay for approval. In absence of traditional metrics such as SSN and Credit Scores, we verify self-reported information in the application through various backend APIs and score it on the same scale as FICO and over time we have found 92% correlation to FICO.
The ABCD system is functional only for international students whose identity and income stability will be determined at first. The next task of Self Score is to find out if an individual is worthy of credit and set a limit for them.
SelfScore has already managed to bring in enormous investments from VC firm Accel Partners. Therefore, it is only a matter of time before ordinary money lenders start to adopt this technology too. The APR is enormous at 19.49%
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