In simplest terms, borrowers and potential borrowers are divided into good, bad and maybe categories, based on statistical probabilities. They figure I am worth a postage stamp. Earlier this year, I attended a lending program during which one of the local banks handed out a loan kit. In an economy in which, according to Fortune magazine, personal bankruptcies have increased 44 percent since 1994 and credit experts report that nearly 40 percent of all consumer debt is racked up on credit cards, well . . . Unlike an IBM or General Motors, the finances of virtually all small businesses have always been deeply intertwined with the personal finances of the owners, partners or shareholders.
Credit scoring appears to be eliminating any daylight between the two.
In today's world, the way you manage yourself at the local mall is seen as a predictor of how you will manage your business' credit. I wouldn't think so. The world's list of genuine magic bullets is mighty short. Yet the implications of this technology can not be understated. Culverhouse College of Commerce and Business Administration.