How GPS Could Change The Credit Industry
Recent American economic policy has dictated that consumers and businesses should try and obtain large credit lines and spend their way to success and profit. Consumption is what drives the economy, and this is why the government has created multiple stimulus packages throughout the years to fuel an American economy that has turned stagnate. However, after many banks placed bad bets on the housing market which helped lead to both the housing and financial crisis, obtaining credit has become more difficult than ever before. Looking to avoid the mistakes that were the catalyst of the recession, banks and creditors are now tightening their belts. Creditors and banks are no longer extending large chunks of cash to anybody with a part-time job or a 500 credit score. Instead, they are now carefully reviewing each person looking to borrow cash to ensure that they pass all potential risks. Although any smart creditor will usually only loan cash to people or companies that have a historical track record of repayment, GPS tracking system technology may change the process in which banks loan cash.
Every creditor has a different process in which they determine whether or not a person or company qualifies for a loan. These banks or loan companies price risk through a process that involves looking at credit scores, household income, ability, and willingness to pay back the loan(s), and more. However, some creditors may be using GPS tracking devices to help aid in the process of determining creditworthiness.
How GPS Could Help Banks
GPS tracking units have the unique ability to transmit location-based information, allowing a consumer, company, or bank the ability to access and review driving information remotely. Banks, creditors, and lenders could use the vehicle tracking technology to monitor the assets purchased through the extension of credit. For example, if banks could provide lower rates for a car loan to consumers, but would require that the purchased vehicle be equipped with a bank-owned real-time tracking unit. Therefore, if the borrower failed to make a loan payment or went into default, the bank could quickly recover the purchased automobile and change the conditions of the loan.
If your bank offered you a lower interest rate if they could equip your vehicle with a car tracking unit, would you take the cost-savings over the loss of privacy?
Do you think banks and credits may use data obtained from a GPS tracker maliciously, or for other applications other than debt recovery?
*Anyone looking for debt relief can contact the Federal Trade Commission or other resources to gain knowledge on how to escape the shackles of high-interest rates.
Matthew is a freelance writer who is passionate about technology, music, photography, and decentralized finance.