Leveraging financial personality for inclusive credit scoring amidst global uncertainty

The Ukraine war, high inflation and rising interest rates are jeopardising people's ability to afford essential items such as food and energy, causing a widespread sense of vulnerability worldwide. Consequently, access to finance has become increasingly challenging for vulnerable consumer groups, including young adults without established credit histories, senior citizens with fixed incomes, start-up entrepreneurs, sole traders, single parents, immigrants in Western markets. To address this issue, this study explores the potential use of individuals' financial personality for inclusive credit scoring in these uncertain environments. Examining a sample of low-income individuals in the USA and the Netherlands, our psychometric scoring models (PSMs) demonstrate that late payments can be attributed to factors such as financial capability, materialistic tendencies, impulsive buying behaviour, social desirability and attitudes towards debt. These findings provide evidence that PSMs offer a viable solution to advance financial inclusion for vulnerable customer segments amidst global uncertainty.