Using historical patterns to predict the next financial success or crisis seems rational. But beware the human psyche’s tendency to concoct order out of randomness.
MIT professor Maria Loumioti has studied loans made strictly using hard data and loans where a loan officer clearly was influenced by personal connections or feelings about a borrower. The results shed light on the value and limitations of "soft" information.
The credit bureaus will change the way they include information about tax liens and civil judgments in credit reports. This could spur lenders' use of alternative credit data.
The president's executive order reflects a lack of trust in the identity information shared between countries. In theory, blockchains are tailor-made to solve this problem, but current systems may not be up to the task.
