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Lenders and credit agencies are adopting geodemographic data checks into prospective home loan customers… is this too far?

How far is too far for lenders to determine whether you are eligible for a home loan or not?

We have seen lenders go to extreme lengths to determine the credit worthiness of a potential home buyer but the latest introduction of ‘geodemographic data’ may have buyers concerned.

Nowadays lenders and credit agencies are using automated decision making and AI technology to segment individuals based on where they live and demographic profile, even going as far as determining how people spend their credit in the prospective buyer’s current area to deem their loan suitability based on average spend.

This kind of assessment puts those with potentially very good credit ratings at a great disadvantage based on their current address being in a poor area.

The digital home loan business-to-consumer segment who adopt such assessments currently only accounts for 3-5% of the market however this is expected to grow as more lenders adopt the new technology into credit checks.

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