Millions of Americans do not have access to credit or are ineligible to be scored. In today’s economy, that can be extremely limiting for those looking to achieve greater financial freedom. Alternative data is a proposed solution to expanding access to credit, giving companies a greater insight into the lives of consumers.
Examples of alternative data include specialty finance and utility data, or any type of payment history data that can help to bolster a credit file. Many different groups of people cannot build credit for a variety of reasons. With alternative data, however, those with thin or invisible credit files can now enjoy some of the luxuries that come with having scorable credit.
Studies have shown that up to 2 million consumers could qualify for prime offers with the incorporation of alternative data and AI. For example, incorporating telco data can lead to a 10 to 25-point positive change to one’s credit score. In fact, with telco and utility data being considered a factor in credit, up to 6.5 million U.S. consumers may be able to move to a scorable status. Alternative data has the power to create and support a more inclusive economy, helping millions across the country achieve financial freedom.
