The article cites Turner, who a few years back wrote this:
> The non-financial data was found predictive in all three outcomes examined when no other ‘traditional’ credit information was used, strongly suggesting that alternative data would be useful to lenders in underwriting the so-called ‘no-file’ or ‘no-score’ consumer who have little or no payment/credit information available.
I think his quote about "laughing out" is taken out of context. No predictive modeler will throw away informative features, because she can not distinguish noise from signal after 26 variables. That's 10 to 1% of a modern credit scoring model. It may be the perspective of a regulator though (they start drowning in noise after reviewing 100+ variables).
Yes, all data that is legal to use and predictive, will get used, if not by you, then by your competitor.
And informative variables that can not be used in the decision to give a loan, are used internally to predict if the loan will be paid back. There is more to credit scoring than the initial yes-no.
The whole article is about how utterly useless the vast majority of "data" ends up being, and how they are not used internally to predict if the loan will be paid back.
So you are 100% in disagreement with this article, and forgive me if I trust a nationally published periodical such as Newsweek of a throwaway commenter on the Internet.
You drew the wrong conclusion about something you don't know a lot about and doubled down. Good luck with that and I forgive you.
You drew the wrong conclusion about something you don't know a lot about and doubled down. Good luck with that, though I don't honestly forgive you.