Amazon and compound finance are two companies that have been using an algorithm to predict your creditworthiness, but the results could actually make your credit report more accurate.
The algorithms used by these two companies is based on data from a company called Credit Score Analytics, and Credit Score Analysts has recently published an article detailing how Amazon’s and Compounds finance’s algorithms are actually being used to make their credit reports more accurate, even though they are completely unregulated.
The algorithm in question is based off of the credit score of people with similar credit scores, which is essentially a weighted average of their credit scores.
Amazon’s algorithm uses that data to compare your credit scores against people with the same credit scores and compare the scores to see which are more likely to borrow.
But what if the data from that credit score is used to predict the creditworthiness of people you don’t know?
“The credit score data used by Credit ScoreAnalysts is based solely on information from a small sample of individuals who were recruited through online advertisements, and the data used to create Credit ScoreAges was derived from publicly available information from credit reporting agencies,” reads a report from Credit Score Analyst, written by CreditScore Analysts CEO Scott Kocher and published by Recode.
“Credit ScoreAged is not a credit score.
It’s a collection of credit score information.”
This is an example of the Credit Score Analysis company using publicly available data to predict creditworthiness.
Credit Score Aged isn’t a credit report, and neither is it a credit history.
Credit scores and credit history are often used to help people with low credit scores understand their credit score, but Credit ScoreAnalysis’s algorithm isn’t using those data to make credit decisions.
“There’s no correlation between the data we use and the credit scores we use,” said Scott Kucher, CEO of Credit ScoreAccelerator, in a statement to Recode on Monday.
“The Credit Score Research Group and Credit ScoresAnalysts use credit score based information in order to provide a better understanding of credit risk.”
The algorithms used to generate Credit ScoreAnswers were also designed to predict whether you’re likely to be a low income, elderly person or a disabled person, according to Credit ScoreExperts.
The results of the algorithm also show that people who are poor, elderly, disabled or living with a chronic health condition have a higher chance of having an inaccurate credit score than people who have no credit history at all.
As the Recode article points out, Amazon’s algorithms used in the Credit ScoresAged report aren’t used to determine your credit risk, but instead to provide you with more information to make decisions about your credit rating.
“We are using credit scores from thousands of consumers who are participating in Credit Score Reports, and we do not use the credit report data to evaluate whether people should be considered ‘prime’ or ‘average’ or how the credit system should be structured,” said Kochen, in an email to Rec in response to questions about the Credit Scores Analysts algorithm.
“Our algorithm only uses the credit reports to predict how consumers would fare if given the same information as they do now, including credit risk scores, credit utilization, and debt levels.”
“We do not provide a credit analysis tool to anyone and therefore do not allow it to predict a consumer’s creditworthiness,” he continued.
“However, we do have credit scores that we have analyzed and we have a relationship with Credit ScoresAnalyst that provides us with information on how consumers use credit scores.”
Credit scores and debt information is very valuable information to lenders, and it’s often used by people who want to make an informed decision about how much they can borrow, which can help them better understand their options and the interest rates they should be considering.
It can also give people who get loans a sense of how much debt they’re likely going to be facing and what types of credit products they can use to help them lower their debt, as well as provide lenders with information about potential fraud.
“While we believe our algorithms can be used for consumer lending, we are not in a position to provide credit advice to customers.
We do not have any consumer loan products that we can recommend,” a spokesperson for Amazon told Rec in an emailed statement.
“As a company we rely on our partners to make these decisions and have never given any advice or insight to any consumer.
As such, we have no comment.”
While credit scores are valuable for people to make better decisions about borrowing and paying for things, credit scores also can have serious implications for the health of your credit.
“While credit score statistics and information can provide valuable information for consumers, they can also be a red flag for people who may be borrowing or who are not paying on their credit,” according to the Federal Reserve Bank of New York.
“Consumers who score below the minimum threshold for their credit may be at higher risk of experiencing credit card debt or consumer loan default,