Just saw a loan approval system flag a clear 'yes' as a 'no' and it's worrying...

I was helping my friend apply for a small business loan online last week. Her credit score is 720, she's been in business for 3 years, and her paperwork was perfect. The automated system instantly denied her. We called, and a human reviewer approved it in 10 minutes. The rep said the algorithm might have been thrown by her business address being in a zip code the system associates with higher risk. It learned a bad pattern. How many good applications get auto-rejected like this without anyone noticing? Has anyone else dug into a denial and found a weird data point that tanked it?

3 comments

3 Comments

laura_chen417d agoMost Upvoted

But those systems catch way more fraud than they miss good people.

west.casey7d ago

Seems like we always accept the bad hits on good people as a fair trade.

nancyg146d ago

Actually used to agree with west.casey on this. Thought the trade-off was messed up. Then saw what laura_chen41 said and looked into it. My cousin got his tax refund held up for weeks over a tiny error, which felt awful. But the same system flagged a huge identity theft attempt on my mom's account last year. It's a rough system, but maybe it has to be that blunt to catch the real bad stuff.