In his post, David seeks to cover how credit data and scores work in typical practice, how lenders tend to tweak these methods in turbulent times, and why credit data is insufficient for today’s situation. Finally, he shares some ideas on the necessity and potential of highly-specific, individual-level understanding of cash-flow and borrower dynamics that will become necessary in a post-covid world. He says that, "Lending is fundamentally a business of decision-making under uncertainty and managing asymmetric risk. Lenders earn a small amount of money for each customer who repays but lose a large amount of money for each customer who defaults." Moving on to the current context, he explains that, "the present crisis demonstrates and amplifies the need for highly-specific, borrower-level understanding of cash flow in making lending decisions and managing risk. While some forward-thinking lenders have begun underwriting based on cash flow, with demonstrably positive results, we are only in the early stages of this transformation."

https://www.ocrolus.com/the-insufficiency-of-credit-data-in-a-non-financial-crisis/?utm_content=David+Blog