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How Tech is Changing the Modern Credit Landscape

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From the beginnings of General Motors Acceptance Corporation to the introduction of the Diner’s Club charge card, the history of credit has been filled with game-changing innovations.

Today, new innovations in tech are continuing to shape the consumer credit industry – and with U.S. consumer debt sitting at $13 trillion, these changes could play a role in impacting how consumers access credit both today and in the future.

The Modern Credit Landscape

Today’s infographic comes to us from Equifax, and it gives a snapshot of modern credit as well as a perspective on how new technologies such as trended and alternative data are changing the landscape.

It’s the second part of our ongoing three-part series on credit:

Part 1: The History of Consumer CreditPart 2: Modern CreditPart 3: Future
How Tech is Changing the Modern Credit Landscape
Part 1: The History of Consumer CreditPart 2: Modern CreditPart 3: Future

Credit scores play a massive component of consumer life, and they are used to gauge creditworthiness for big purchases ranging from homes to launching a business.

Interestingly, how this scoring works is not at all static – and new technology is being applied to increase accuracy as well as open credit up to more consumers throughout society.

Traditional Credit Scoring

The modern numeric credit score emerged in 1989, and it uses logistic regression to make informed decisions on a consumer’s creditworthiness.

The scoring model is made up of five distinct categories:

CategoryPercentageDescription
Payment History35%Are scheduled payments made on time?
Debt Burden30%Includes multiple factors such as number of accounts with balances, amounts owed, and debt-to-limit ratio.
Length of Credit History15%Average age of accounts and age of oldest account.
Types of Credit Used10%What type of credit is used? (i.e. revolving, installments, etc.)
New Credit Requests10%Hard new credit inquiries can hurt scores.

But this model does have its limitations. For example, traditional credit scores give a snapshot of credit rather than showing how the “big picture” of a person’s credit is changing. Further, current scores can also can be inhibited by a lack of data, resulting in an inaccurate representation of a person’s credit.

Tech to the Rescue

On a global basis, the data universe is doubling every two years – and this abundant new resource is revolutionizing consumer credit.

Trended Data
Instead of looking at a snapshot of a credit score, it’s possible to analyze the direction, velocity, tipping points, and magnitude of changes in a consumer’s credit history to get a bigger, more accurate picture. This is called trended data, and it can offer up to 20% improvement in predictive performance.

Alternative Data
Credit history is important, but there are increasingly other sources of data that can provide a view of a consumer’s creditworthiness. Alternative data taps into information on property ownership, wealth, how customers pay everyday bills, and other data sources to provide a more well-rounded picture.

Other Tech
Technology has given consumers unprecedented access to their credit data – and in the meantime, new science behind neural networks is being implemented to give even more sophisticated scoring capabilities.

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Technology

Nvidia is Worth More Than All of These Companies Combined

Gain a unique perspective on the market cap of Nvidia in this simple graphic.

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Putting the Market Cap of Nvidia Into Perspective

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Nvidia’s massive rise in the AI era has been well-documented, but did you know that it’s currently the world’s third most valuable company?

To put the massive market cap of Nvidia into perspective, we’ve put it side by side with a collection of other major U.S. tech companies.

All figures were sourced from Companiesmarketcap.com, and are as of May 23, 2024.


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Data and Takeaways

All of the numbers we used to create this graphic are included in the table below.

CompanyMarket Cap
(as of May 23, 2024)
Nvidia$2.5T
Meta$1.2T
Tesla$553B
Netflix$272B
AMD$257B
Intel$128B
IBM$157B

These figures are even more impressive when you consider that at the beginning of 2020, Nvidia was valued at a relatively tiny $145 billion.

Since then, the company has greatly surpassed other American chipmakers like Intel and AMD. This growth is due to several key factors:

  • Expansion into AI and data centers: Nvidia’s chips are highly effective for AI training, making them essential for companies engaged in machine learning and generative AI
  • Advancements in AI software: Nvidia has developed AI software platforms, such as CUDA-X and TensorRT, which are widely used by researchers.
  • Strong financial performance: Nvidia has consistently delivered strong financial results in recent years, with substantial revenue growth.

Closing in on Apple

With Nvidia’s latest stock surge (up 13.5% over the past five days ending May 24, 2024), the company could possibly overtake Apple to become the world’s second most valuable company.

Microsoft, another major player in AI, holds the #1 spot with a market cap of $3.2 trillion.

See More Visuals on Nvidia

If you enjoyed this graphic, be sure to check out this graphic that breaks down Nvidia’s revenue by product line, from 2019 to 2024.


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