Telecom-based credit scores refer to a type of credit scoring system that uses data from a person's mobile phone usage, such as call and text records, to determine their creditworthiness. This type of scoring system is an alternative to traditional credit scoring methods, which rely on information from credit bureaus and financial institutions.
One of the main advantages of telecom-based credit scores is that they can be used to assess the creditworthiness of individuals who have limited or no credit history. This can include people who are new to the credit system, such as recent immigrants or young adults, as well as those who have been excluded from the traditional credit system, such as people with low incomes or who live in rural areas.
Telecom-based credit scores are also seen as more accurate and less prone to errors than traditional credit scores, as they are based on real-time data rather than historical information. Additionally, it could be integrated with other forms of data such as transaction history and social media activity to create a more comprehensive view of the individual's financial situation. As mobile phone usage is widespread, this could potentially open up access to credit for many people who would otherwise be unable to get it. However, there are also concerns about data privacy and security, as well as the potential for discrimination based on the data used to calculate the scores.