Feel the hair on your neck rising? Your bank is watching, with greater scrutiny then ever before. Banks are figuring out new scores and models to figure out your credit worthiness, using everything from how you deposit and withdraw money to how you pay your rent.
Sound scary? Well, this is to be expected. One factor in the housing crisis was the over-reliance on the overly-broad and, at the time, pretty gameable FICO system. So now credit bureaus, information warehouses, and banks are working together to get some increased granularity on you using:
* Your banking behavior (your balance and how you withdraw and deposit)
* An estimation of your income (which you don’t get to see)
* Rent payment history
* Credit bureaus are sending daily reports out to collection agencies indicating if your financial status changes. Say, if you got a job or started paying off a debt, which could show you’re ripe to go after for other unpaid debts
* Home value
If you’ve been a good consumer and paid all your bills on time, this could open up new borrowing opportunities or better rates for you. If you’ve been slipshod, it could end up harming your ability to access certain financial tools.