Anyone who has been turned down for a loan based solely on their credit rating knows the sting of being treated as just a number. We all want to be judged on our intents and aspirations, not condemned based on a few late credit card payments after last summer’s vacation. As it turns out, judging based on a single number can shortchange lenders as well as borrowers. Research is showing that a more comprehensive picture based on “soft information” as well as numbers can serve as a firmer basis for judging risk of default.

Soft information can include anything from a picture of the applicant, to a narrative of their purpose for the loan, to the search history stored on their mobile phone. In the past it was too costly to take these factors into consideration when deciding on micro and small loans, but crowdsourcing, personality testing and mobile technology are now making it possible.

This is good news for small borrowers – those in rich countries with low credit scores and those in poor countries with no credit score. And it represents a promising new direction for those seeking to lend to them.