Today we're going to talk about a credit scoring, both traditional means as well as digital credit scoring, often called the social credit scoring. So let's first start out with Credit Bureau Scores, what are they? So these are traditional scores that you get. So typically, there's a credit report that shows your bill payment history, your current debt, and other financial information, and companies and lenders use your credit report to compute your credit score. So the credit score is normally a number between 300 and 850, and it reflects how good your creditor is or your credit health. The higher the credit score, the better your health, and that would normally get you lower interest rates. So in the US, 90 percent of the credit scores they use FICO scores. So to get a FICO score what do you need? You need to have enough of a credit history. So at least one account open for six months or longer, and at least one account reported to the credit bureau within the last six months. So if we look at what does FICO score base its report on? There are five key factors, and they're listed here. So the first is new credit, and FICO puts a weight of 10 percent on this. So if you've opened lots of new credit lines recently, and this is not considered good, and it puts you at a higher risk, and this reduces your FICO score. The second factor is Credit mix. So do you have credit cards? Do you have retail accounts, installment loans, finance company accounts, mortgage loans, all of this will also factor into your FICO score. The third factor is the length of your credit history. The longer your credit history, the better it is. So this gets a weight of 15 percent in the FICO score. The fourth factor are the amounts owed. So if you are using a large percentage of your available balance or your available credit, this is considered a bad sign or it signifies higher risk, and gets imputed as such into your FICO score. So this gets a weight of about 30 percent. Then last but not least is payment history. So if you've been paying late or you missed your credit payments, that makes your higher risk, again will affect your FICO score. Okay. So these are the factors that are incorporated in the FICO score. I think it's also important to recognize what FICO scores do not take into account. So what do they not consider? They don't consider race, color, religion, national origin or marital status. They don't consider your age, your salary, your occupation, your title, your employer, when you were employed or your employment history, they don't consider where you live, and they don't consider how high is your interest rate on particular credit cards or other accounts. What else do FICO scores not consider? Any other items like the reported such as child support or family support, certain kinds of inquiries. So you know how we all get these promotional credit card mailings, and so credit card companies will often go and try and figure out or make inquiries about your credit worthiness, so that they can model you a promotion offer. So those will not count against you in your credit score. Any information not found in your credit report will not be input into the FICO score, and any information not proven to be predicted of future credit performance, and whether your participate in credit counseling of any kind. So this is if you go to the credit bureau website or the FICO website, this is what they'll have on it, saying, "These are the factors we consider and these are the factors we do not consider," and once you know what factors are considered, you can see your ways to working yourself to a better credit score, by, for example not opening too many new accounts. Okay. So there's the traditional credit scoring done by credit bureaus worldwide, and then there's the new credit scoring, and that is often called social credit scoring. Another way of thinking about it is, what are the digital footprints we leave behind when we access the web, and can that information be used in order to predict credit worthiness? So that's the next thing we're going to look at, and because this is a new and a nascent area, we're going to rely on research, and so there's a paper I've written looking at the informativeness of digital footprints, and so that's the next thing that we'll look at.