• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
GoLoans

GoLoans

  • Personal Loans
    • Signature Loans
    • Debt Consolidation Loans
    • Wedding Loans
    • Home Improvement Loans
    • Signature Loans
    • Medical Loans
      • Dental Loans
  • Business
    • Business Loans
      • High-Risk Business Loans
    • Business Credit
  • Home Loans
    • Home Equity Loans
    • Home Equity Line of Credit
    • Bad Credit Home Loans
    • First Time Home Buyer Loans
  • Bad Credit Loans
    • Tribal Loans
    • Installment Loans
    • Payday Loans
    • Car Title Loans
    • No Credit Check Loans
    • Emergency Loans
    • Same Day Loans
    • Short Term Loans
  • Auto Loans
    • Bad Credit Car Loans
  • Student Loans
    • Private Student Loans
  • Financial Help
    • Free Credit Score
    • Loan Sharks
    • Debt Relief
      • Debt Management Plan
      • Credit Counseling
    • Credit Repair
      • Credit Repair Companies
    • Calculators
      • Car Title Loan Calculator
      • Motorcycle Loan Calculator
    • Credit Monitoring Services
  • Reviews
    • Lenders
      • Bad Credit
        • Tribal Lenders
Home » Personal Loans » Lenders Require More Personal Information on Loan Applications

Lenders Require More Personal Information on Loan Applications

March 9, 2020 by Brian Allen

Prepare to Give Lenders More Personal Information on Applications (Here’s Why)

For years your credit report data was enough for lenders to judge whether or not you are worthy of a personal loan. Recently, however, lenders have become hungry for what almost all companies want in 2020; more data. According to a 2018 report by the independent research and advisory firm Aite Group, some fin-tech companies and lenders are now requiring alternative data such as income, occupation and education data in addition to credit score information before you can get a personal loan. Personal loans are what they sound like; a loan used by anyone for various expenses such as a home improvement loan, loan for a wedding or even moving costs.

Lenders are utilizing alternative data in order to protect themselves from poor personal loan decisions, as well as gain new customers who may otherwise be at a disadvantage when being judged on credit score alone.


Alternative Financial Data: Friend or Foe?

A recent report by the Consumer Financial Protection Bureau (CFBC) revealed that 22% of Americans don’t have a credit score at all, limiting their means to obtain personal loans, large purchases such as a house or car. There are inequalities related to career and education areas. A 2018 Bureau of Labor Statistics report shows that employed white and Asian people hold the majority for working in professional or management fields.

Experian PLC, a consumer credit reporting company released a 2019 study showing that loan companies are attempting to avoid racial discrimination by focusing on solely the verification of income and employment, and property judgments for top sources of alternative data. Millennials are also being rejected more and more for loans; another reason why alternative financial data may help improve their credit risks.


Contempt for Credit Scores?

Alternative data is becoming popular for a reason; both lenders and consumer advocates agree that the credit scoring system has flaws. Consumers would be wise to review and correct their credit reports if they spot errors, which is free of charge. Regardless of the errors and confusion, Experian PLC found that only 42% of consumers believe they are better borrowers than their credit scores represent. Chief Product Officer of the online lender Earnest, David Green, says his company uses both credit score and bank account information to give a holistic view of a person’s financial actions.


Calls for Clarity

With consumer data becoming more scrutinized and utilized by data lenders, consumers need to be aware and be able to access information with a high degree of transparency, said Brent Adams, Senior Vice President of policy and communication for the Chicago-based financial research and advocacy nonprofit Woodstock Institute.

Filed Under: Personal Loans

About Brian Allen

Brian Allen has been helping people make smarter financial decisions for over 10 years. As the Editor-in-Chief for Goloans, Brian writes about sage financial advice, "how to" articles, and reviews about lenders and creditors.

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

RESOURCES

Featured Articles

  • Title Loans in Maryland: What You Need to Know
  • How to Get a Title Loan in Mississippi
  • Title Loans in Nebraska: What You Need to Know
  • Title Loans in New Hampshire: What You Need to Know
  • Title Loans in Arkansas: What You Need to Know
  • Title Loans in Alabama: What You Need to Know
  • Finding the Best Tribal Loan for Your Needs
  • Getting an Indian Tribal Loan: What You Need to Know
  • Exploring the Benefits of Tribal Loan Companies
  • Understanding the Benefits and Risks of Tribal Payday Loans
  • The Easiest Tribal Loans to Get: A Comprehensive Guide
  • Understanding the Benefits of Tribal Payday Loans
  • Title Loans in Hawaii
  • Title Loans in Colorado
  • Get an Online Tribal Loan Today: A Guide to Finding the Right Lender
  • Getting Tribal Loans with Bad Credit: What You Need to Know
  • Secure Tribal Loans from a Direct Lender
  • Getting a Bad Credit Tribal Loan: What You Need to Know
  • How to Avoid Falling Prey to Loan Sharks
  • How to Avoid Becoming a Victim of a Loan Shark
  • Understanding the Risks of Usury: What You Need to Know
  • Where to Find Loan Sharks Near Me
  • Where to Find Private Loan Sharks Near Me
  • The Dangers of Taking Out Loans from Online Loan Sharks
  • Where to Find Loan Sharks Tonight
  • Buy Now, Pay Later with Bad Credit and No Deposit Required
  • How to Find a Loan Shark Safely and Responsibly
  • Get Guaranteed Installment Loans with No Credit Check
  • The Dangers of Borrowing Money from Private Loan Sharks
  • Finding a Reputable Loan Shark Private Lender

Footer

Advertiser Discoslure

GoLoans is reader-supported. When you buy through links on our site, we may earn an affiliate commission

© 2018–2023 · GoLoans | About | Contact | Terms of Use | Privacy Policy