A discussion paper on the grey area – the ethical problems related to big data credit reporting

With the rise and the development of the “credit society”, the credit reporting has played a central role in evaluation one’s credit statues, including monitoring and updating creditworthiness of individuals. As the emergence of big data, new tools enabling the credit reporting system to develop new level, by collecting the online and offline data to establish more completely score system. This review paper is aimed to present the difference between the new big data credit reporting and traditional credit reporting, and then explain advantages offered by the new data management. Subsequently, ethical problems will be described due to rising concerns. Being “kidnapped” by the credit reporting applications, users’ data will be collected and disposed without prior permission. Some data processes may arise with the messy, unreasonable and fake data resource problems to add more complexities to the existing services which are unable to cope with. As a result, individual users could not verify the correctness of the data and did not know which data would be more trustworthy to be verified for payment and billing. To be worse, users even do not know how to improve their creditworthiness if they have done everything correctly. There are some issues about precision marketing, since some data brokers will target the individuals who was vulnerable to the non-performing and short-term loans. Last but not least, the algorithm of big data prone to evaluate the credit score by groups that individual related to, rather than the individual’s own merits, which may lead to discrimination issue, and accelerate the wealth gap problem.