Psychometric or 'personality' tests are already widely used by employers to gauge whether candidates would be a good fit for their workplace. But you may find yourself answering one when taking out a loan in the near future.
For the lucky ones who haven't done this type of test before, they're usually made up of a series of questions designed to show your personality type. Don't despair though, you won't be bombarded with images of ink blots and lenders will be more interested in your money habits than your relationship with your mother.
It's thought that the tests could be useful for those with little or no credit history, who can be something of an unknown quantity to banks and building societies. You may want to think again if you're planning to dazzle lenders with your sparkling personality though. There will still be a credit check; the new tests would just be a cheeky addition to the process.
"Psychometric test results would, of course, be used in addition to existing data," said Jonathan Crook, director of the Business School's Credit Research Centre. "But the test results would be particularly useful when it comes to lending to customers who have never borrowed before and don't have a credit history that proves to banks that they are a good risk."
As for the nature of the tests, it's unlikely to be an essay on your earliest childhood memories. If they're used by lenders, you can expect a short questionnaire on how much you agree with certain statements such as 'I consistently put time and effort into everything I do' and 'I find it hard to make change'. Through answering these they can construct a picture of your personality type, like how much of a risk-taker you are.
Of course there are naysayers who believe that a personality test can't possibly determine how trustworthy you are at making repayments, but here at the Money Shot we believe it can't do any harm to try it out. Whether people answer truthfully is another matter entirely…
Main image by Alberto G. via Flickr.
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Money Shot Letters
I very much enjoyed last week's Money Shot on whether you could live out the rest of your life on £1m. As a millionaire (I amassed a small fortune selling Tamagotchis in the '90s) I can categorically state that a measly mil' will hardly last the year if, like me, you live the playboy executive lifestyle.
Yachts and champagne showers don't come cheap you know. Seven ex-wives later and I'm down to my last £5m, so it's a thrifty lifestyle for me from now on. Any tips?
Arthur Winterduke, Monaco
[Hi Arthur – you'd do well to read our aforementioned guide to saving on your weekly shop. Additionally, you could also mull over monetising your home – there are loads of ways to do it. Best of luck! Frugality ed]
Join us next week for another knee-trembling edition of the Money Shot, until then send us your letters