(OPINION) Your credit score determines everything from whether you’ll get a mortgage, but what if there’s a more accurate way of measuring your creditworthiness? Your digital footprint—the profile you amass as you register for websites and surf the internet—can be more accurate than a credit bureau score when it comes to predicting consumer trustworthiness,
according to a new study conducted by the Frankfurt School of Finance & Management. Using more than 250,000 measurements and analyzing 270,399 purchases made to a Germany-based e-commerce company, the researchers were able to determine with, they contend, a higher rate of accuracy whether a customer would make payments on time.
Trustworthiness was particularly important to this particular company because its customers pay for products after receiving them. The company used in the study was not named, but researchers said it’s similar to U.S. furniture store Wayfair W, -0.61%. Did a customer visit a website via a search engine or display advertisement?
The former is seen as more valuable. Customers who use their real names in an email address are 30% less likely to default, the researchers found. It even measured the number of typing errors.
Is the customer an Apple AAPL, +1.69% device or Android owner? The difference in default rates between Apple and Android users is equivalent to the difference in default rates between a median FICO score and the 80th percentile of the FICO score, the study found. READ MORE
