The Secret Numbers as Important as Your Credit Score

  • By Jennifer Waters, Marketwatch
  • October 22, 2014

Sometimes, Cash is Still King
Until then, you can game the system to a certain degree by choosing cash over credit or debit cards for some purchases. “If you have something sensitive to purchase, pay in cash,” Dixon suggests. But if you’re buying something from, say, a sports retailer or equipment maker, use a credit card. “That assumes you’re athletic and may have a potential positive influence on the amount you pay for health care,” she adds.

Here’s a rundown of some of these alternative consumer scores and why they’re used, according to Scoring in America:

Churn scores — These are abundant and can predict when you might dump your bank or cellphone provider for a competitor. In-house scores are used by layering historic customer sales data with outside analytics to build custom scores.

Tenant score — These give a history of evictions and use credit bureau and other data to determine if you will be a trustworthy lessee. They do fall under federal privacy regulations.

Insurance scores — These also are under federal mandates because they use credit scores and credit information to determine the costs of auto and homeowners insurance. Insurance scores, however, differ from credit scores because many companies have their own algorithms.

Health scores — Seven years ago when Dixon and Gellman first did research on consumer scores, they found few health scores. Now, however, they have uncovered “significant and high-impact consumer health scores in use.” Health records held by health-care providers or insurers are subject to federal health privacy rules, but there is a growing record of health information that falls outside those parameters. The information you give to health and fitness clubs, cosmetic-medicine services, massage therapists, even transit companies is compiled.

“Consumers routinely disclose health information to companies that promise to provide coupons,” the report says. “Consumers rarely understand that companies can collect personal information that they can later sell.”

Frailty scores — These generally are for the elderly and are growing in importance as our population ages. They can point to the likelihood of patient post-operative surgical complications or readmission to a hospital as well as mortality, to within one year.

Peer-to-Peer Energy People Meter Score — You may have seen some form of this already in your gas or electric bill. It measures a residential customers’ energy consumption patterns and compares them to their neighbors, in hopes of inspiring better energy efficiency.

Social scores — These collect individual and household social engagement and not all are opaque. Klout, for example, will very transparently gauge overall social-media influence while Tweet Grader will analyze your Twitter account to help you step up your influence.

Law enforcement scores — A 2013 Rand report uncovered much about predictive policing and how law enforcement creates and uses risk scores to figure out who the bad guys are.

Homeland Security scores — We don’t know much about how these scores are collected or used, but we do know that airline passengers have been screened for some time now. Homeland Security collects data and links it with other sources to establish a risk score for each passenger. The Transportation Security Administration uses it too.

Fraud scores — These are used to help detect if you’re a victim of fraud or how likely you are to become one. In some cases, they can reduce fraud by 50%. But fraud scores are also used to figure out if you are the fraudster.

Predictive anti-fraud scores — The U.S. Postal Service uses predictive analytics to scale through more than 30 indicators to “flag and rank instances of suspicious activity.”

Casino-gaming propensity score — All bets are on that this one can predict gambling addictions based on online and in-person visits to casinos and gaming sites.

Jennifer Waters is a MarketWatch columnist based in Chicago. Follow her on Twitter @JenWatersMKW. This article originally appeared on MarketWatch.com and is reprinted by permission from Marketwatch.com, ©2014 Dow Jones & Co. Inc. All rights reserved.

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