Algorithms are making the same mistakes assessing credit scores that humans did a century ago

Credit in China is now in the hands of a company called Alipay, which uses thousands of consumer data points—including what they purchase, what type of phone they use, what augmented reality games they play, and their friends on social media—to determine a credit score.

However, there is no clear rules or guidelines about how these algorithms work to determine a credit rating. Buying cheaper brands of groceries might be construed as indicating financial distress and being at a greater risk of defaulting on payments.

There is a call for greater transparency on how these systems are used to ensure accurate and fair reporting of credit worthiness.

Read the full story at https://undark.org/article/algorithmic-credit-scoring-machine-learning/

SOURCE: Undark