Max Levchin claims any single data point that seems to dramatically improve underwriting accuracy is a red herring. He argues these 'magic bullets' are brittle and fail when market conditions shift. A robust risk model instead relies on aggregating small lifts from many subtle factors.

By eliminating outdated constraints like the six-month activity rule and incorporating time-series data and alternative inputs like rent payments, modern credit scoring models can assess millions of creditworthy individuals, such as military personnel or young people, who were previously unscorable.

Heather Dubrow assumed her doctor husband's finances were solid but reveals her credit score is higher, indicating greater fiscal discipline. This illustrates that a high-status job or large income doesn't guarantee financial responsibility; a credit score is a more direct measure of reliability.

Steve Jobs fostered an inclusive premium brand accessible to anyone with money. Applying this to the Apple Card meant low credit score requirements, which conflicted with the financial necessity of risk-based rejection in lending. This philosophical mismatch contributed significantly to Goldman Sachs's portfolio losses and the partnership's failure.

Steve Jobs' vision of Apple as an inclusive brand conflicted with the necessary exclusivity of credit risk assessment. This led to lower underwriting standards (credit scores around 600) for the Apple Card, contributing to its poor performance and eventual sale by Goldman Sachs at a discount.

With many "Buy Now, Pay Later" (BNPL) services not reporting to credit bureaus, lenders face "stacking" risk where consumers take on invisible debt. To get a holistic view, lenders are increasingly incorporating cash flow data, like checking account trends, into their underwriting processes.

Consumers are largely insensitive to the interest rates they are charged, rarely seeking out cheaper options like credit union cards. This behavioral pattern means that cutting rates is an ineffective customer acquisition strategy. Instead, issuers invest heavily in marketing, which proves more effective at attracting new borrowers.

Instead of rejecting applicants, Nubank placed them on a waitlist, creating scarcity and desire. They gamified it by giving priority to users invited by friends, simultaneously fueling viral growth and collecting valuable data for their credit models.

By eliminating late fees and compounding interest, Affirm removes any financial upside from borrower mistakes. This forces the company's business model to depend solely on successful repayment, demanding superior, transaction-by-transaction underwriting to survive.