Alternative Data for Lending: How to Use Databases, Social Media, and More to Find Loan Opportunities

Lending is a huge industry, and it’s always looking for new and innovative ways to find loan opportunities. One way that lenders are doing this is by using alternative data sources. Alternative data includes information from databases, social media, and other online sources. By using alternative data, lenders can get a better understanding of potential borrowers and make more informed lending decisions. In this blog post, we will discuss how to use alternative data for lending purposes.

Table of Contents

Alternative data for lending

Databases are a great source of alternative data. They can provide information on things like credit history, employment history, and more. By using databases, lenders can get a better understanding of a potential borrower’s financial history and make more informed lending decisions.

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Social media is another great source of alternative data. It can provide information on things like a person’s interests, activity level, and more. By using social media, lenders can get a better understanding of a potential borrower’s lifestyle and make more informed lending decisions.

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Other online sources of alternative data include things like online shopping activity, web browsing activity, and more. By using these sources, lenders can get a better understanding of a potential borrower’s interests and make more informed lending decisions.

Alternative data for credit scoring

Credit scoring is the process of determining a person’s creditworthiness. By using alternative data, lenders can get a better understanding of a potential borrower’s creditworthiness and make more informed lending decisions.

Lenders can use the following types of alternative data:

Transaction Data: This type of data includes information on things like credit card purchases, utility bills, and more. By using transaction data, lenders can get a better understanding of a potential borrower’s spending habits and make more informed lending decisions.

Demographic Data: This type of data includes information on things like age, gender, income, and more. By using demographic data, lenders can get a better understanding of a potential borrower’s financial situation and make more informed lending decisions.

Telecom, Utility, Rental Data: This type of data includes information on things like phone bills, utility bills, and rental payments. By using this type of data, lenders can get a better understanding of a potential borrower’s ability to make payments and make more informed lending decisions.

Social profiles: This type of data includes information from social media sites like Facebook, Twitter, and LinkedIn. By using social profiles, lenders can get a better understanding of a potential borrower’s interests and make more informed lending decisions.

Sources of alternative data

In order to use alternative data for credit scoring, lenders need to have access to the data. There are a few ways to get access to alternative data:

Data Brokers: Data brokers are companies that collect and sell data. They usually have a large database of alternative data that they sell to lenders.

Data Aggregators: Data aggregators are companies that collect and sell data. They usually have a large database of alternative data that they sell to lenders.

Data Providers: Data providers are companies that provide data to lenders. They usually have a large database of alternative data that they provide to lenders.

When using alternative data for credit scoring, it is important to remember that the data is not perfect. There will always be some uncertainty when using alternative data. However, by using alternative data, lenders can get a better understanding of a potential borrower’s creditworthiness and make more informed lending decisions.

Alternative data in credit underwriting

Credit underwriting is the process of determining a person’s creditworthiness. By using alternative data, lenders can get a better understanding of a potential borrower’s creditworthiness and make more informed lending decisions. Statistics show that lenders are increasingly using alternative data in credit underwriting.

Closing thoughts

Alternative data can be a useful tool for lenders. By using alternative data, lenders can get a better understanding of a potential borrower’s creditworthiness and make more informed lending decisions. However, it is important to remember that the data is not perfect and there will always be some uncertainty when using alternative data.