Democratizing Credit? Data, Quantification, and Surveillance Capitalism

• Published in: Société Française de Statistique (SFdS) Vol. 12 | 3
• Main Author: Carruthers, Bruce G
• Format: Journal Article
• Language: English
• Published: Statistique et société 2024
• Subjects: Score de crédit; démocratie; regulation; régulation; capitalisme; data subject; capitalism; discrimination; Credit score; democracy
• ISSN: 2269-0271; 2269-0271
• DOI: 10.4000/13pbh

For ordinary US households, one of the most important changes of the last 60 years has been the development and spread of credit scores. These numerical measures of individual credit risk are calculated on the basis of financial data, and distributed by credit rating agencies like TransUnion and others. They are typically called “FICO scores” and now cover hundreds of millions of individuals. These scores govern access to credit, but are also increasingly used for insurance, employment, and housing. Hence, they have become fateful for data subjects. Critics argue that because of race and gender discrimination, significant numbers of people are denied access to credit and other financial services, and they advocate for a more “democratic” credit system. As the usage of credit scores spreads, and as they are applied in credit algorithms, they are being challenged and augmented by new on-line data harvested by “fintech” firms. Despite this data-driven transformation of consumer credit, rating agencies are only lightly regulated, even as problems concerning information ownership, security, and privacy, as well as financial inclusion, become acute. New approaches are required to reconcile this complex tangle of private and public interests.