Aire promises to calculate a fair credit score for 'thin file' customers based on self-submitted data rather than past repayment history.
Nearly 4.5 billion people don’t have a formal credit score, meaning they cannot access loans or credits cards. Often these are expats, migrants or students who simply have a thin file — which reflects badly in traditional credit scoring models. Now, Aire promises to calculate a fair credit score for these potential borrowers — based on self-submitted data rather than past repayment history — and enable them to gain access to important financial products.
Nearly 25 percent of the adult population in the US and UK fall into the ‘thin file’ bracket, meaning Aire’s service will significantly increase the pool of scored customers for lenders. To begin, customers submit their own data, which is then encrypted and processed by the startup’s API. An algorithm analyzes data such as the customer’s professional background, decision-making process, and cognitive intelligence to determine whether they are suitable for financial products such as credit cards, car loans or even mortgages.
Aire is currently in Beta and accepting applicants for early access. We recently saw Vouch offer consumers better loan rates by crowdsourcing small financial guarantees from friends and family. Could more companies use alternative data and processes when assessing a customer’s financial background?