A generation ago, personal credit scores were the province of three bureaus, and it took more than a year to correct mistakes or improve ratings. Now, everything is different. Not only do AI (artificial intelligence) and big data play a central role in scoring, but there are many scores in addition to the three dominant bureaus. Two things working adults in the 2020s can do to boost their ratings are to maintain bank accounts and apply for credit cards while still in college.
In less than six months, it’s possible to improve scores in ways other than paying bills on time. Plus, lenders tend to look at various rating systems other than the “Big 3.” Those who know how to spend and save responsibly understand the essential value of working on their scores. What few consumers know is that AI lending applications take all kinds of information into account when deciding whether to approve a loan application.
First Cards for College Students
A decade ago, it was difficult for college students to get a credit card. That situation made it hard for young adults to establish and build financial histories. Fortunately, things have changed considerably. If you’re ready to apply for your first-ever credit card, you have plenty of options. But it’s imperative to review a special guide, just for college students, that walks through every relevant detail of the process.
Who’s a good candidate for getting a first credit card? Think about applying if you’re ready to manage your own finances and develop a sensible monthly budget. Additionally, be ready to explore interest rates, spending limits, and other features. Choose a card that matches your needs and caters to your spending habits. Having a card in your own name can have a positive impact on personal credit scores.
Ability to Improve Ratings
It used to take many months to see any results from a credit improvement effort. Now, consumers can gather pertinent information quickly via online resources and get started quickly. Because card issuers report in a timely manner, keeping credit cards at low balance levels can change scores in a matter of weeks. Plus, cardholders can correct errors on their bureau reports much faster than before. All those factors work together to give individuals more power over their financial histories.
AI Takes Non-Financial Factors Into Account
Today’s AI-driven programs, systems, and apps can evaluate any number of personal data points to develop an estimate of creditworthiness. New loan companies, some of which operate online exclusively, use AI estimating techniques to arrive at decisions on loan applications. Not only does the approach lead to faster decisions, but it also uses a wide range of data sources.
One of the powers of the new method is that it can measure non-financial characteristics of a person’s data file to gain important insights about the ability to repay an obligation. AI-driven apps can gain plenty of insight from spending habits, where someone lives, how long they’ve worked at their current job, and more. Even when AI programs take part in loan decisions, humans do the directing and initiating of the process.