Bias isn’t the only problem with credit scores—and no, AI can’t help

Must read

I Didn’t Want to Push My Aunt to Get the Vaccine. Now I Live With Regrets

In normal times, the ICU is a dreadful place. Sickness lingers like a fog. You can feel it, sense it, even hear it—the machinery pumping,...

Sephora Oh Snap! Sale: Get 50% Off Mario Badescu, BareMinerals & More

This is a 2-in-1 ultrasonic skincare device that unclogs pores and helps infuse your favorite skincare products. It deep cleans pores, extracts blackheads, and increases circulation...

45 Detroit Lions have tried to pass since the franchise’s last playoff win. How they rank

Sunday brings a new era for the Detroit Lions, as quarterback Jared Goff, acquired from the Los Angeles Rams in the offseason trade of...

But in the biggest ever study of real-world mortgage data, economists Laura Blattner at Stanford University and Scott Nelson at the University of Chicago show that differences in mortgage approval between minority and majority groups is not just down to bias, but to the fact that minority and low-income groups have less data in their credit histories.

This means that when this data is used to calculate a credit score and this credit score used to make a prediction on loan default, then that prediction will be less precise. It is this lack of precision that leads to inequality, not just bias.

The implications are stark: fairer algorithms won’t fix the problem. 

“It’s a really striking result,” says Ashesh Rambachan, who studies machine learning and economics at Harvard University, but was not involved in the study. Bias and patchy credit records have been hot issues for…

Read more…

Related News

Latest article

New blockchain platform aims to track one-third of all shipping containers globally By Cointelegraph

New blockchain platform aims to track one-third of all shipping containers globally Global Shipping Business Network (GSBN) has launched a new blockchain-based platform that could...

FBI begins declassifying documents into Saudi 9/11 links

The memo lists some contact between Saudi nationals and hijackers, but does not implicate the government. Read more...

After seven years, an Apple car is still on the horizon

Minutes after the news broke this week that Doug Field, the former Tesla executive who led Apple’s car project, was defecting to Ford, the...

Is the Government of St. Kitts & Nevis now a Criminal Enterprise?

Today CS Global Partners advertised a special in releasing a press release on PR NewsWire for journalist to pick up and publish a fear...