Alternative lenders use all sorts of complicated models based on sophisticated algorithms and machine learning in extrapolating data that is never certain or reliable. Cosigning is simple. It relies on a real person with a prime credit score. The equation is reduced to a number and a heartbeat.

To deliver above average returns to investors, online lending startups have been grabbing alternative data from a potential borrower’s email, social media, and even mobile accounts. They are determining risk based on a borrower’s likes, shares, and phone usage. There is a better option to capitalize on the $3.5 trillion consumer loan market: Cosigning.

Here are 5 reasons why online lenders like Backed, Inc., which relies on cosigning, yield superior overall returns than those lenders who rely on algorithms that are overloaded with over 10,000 data points:

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