As many as 54 million Americans cannot access traditional, low cost credit because they have insufficient or no credit history. That fact often forces them to turn to high-cost financial resources, or worse, become trapped in a cycle of predatory lending.
Credit Builders Alliance, an organization committed to helping non-traditional financial and asset building organizations serve low and moderate income individuals, recently was host to an invitation-only credit building symposium that brought together representatives from non-profit, for-profit and public sector organizations to begin a dialogue about how we can all work together to address this pressing issue.
I had the pleasure of discussing Experian’s commitment to consumer financial education and how we’ve empowered consumers for more than 20 years. There are more than 220 million credit-active consumers and we have long understood that we cannot reach each of them without help. Building strong partnerships is the foundation of our efforts to reach people with information about credit reports, credit scores, fraud and identity theft and other essential issues. By working with consumer advocates, government agencies and our business clients, we are able to exponentially increase the number of people we can educate. That philosophy is at the heart of our relationship with CBA and our many other partners dedicated to consumer financial literacy and financial inclusion.
Experian’s own employees are an essential part of our consumer education efforts. Our growing Education Ambassador program enables our people to participate in community volunteer events and other programs, sharing their knowledge and expertise wherever they may be, whether with family and friends, a seatmate on a plane, or with our business clients’ staff members.
Experian also continually explores what is commonly referred to as “alternative data sources” that can help people build credit for the first time. The addition of new data sources paired with Experian’s technology and services help underserved consumers gain access to the traditional credit market through non-traditional means. Experian was the first in the industry to report on time rental payments and Brannan Johnston, vice president and managing director for Experian RentBureau, discussed the inclusion of rent payment information in Experian consumer credit reports. Positive rent payment data is a powerful tool for helping consumer establish credit reports and scores for the first time. In fact, our studies show that a VantageScore credit score could be calculated for 87 percent of new consumers after their rent payment information became part of their credit report.
The dialogue initiated by the CBA can play a pivotal role in overcoming the business and regulatory issues that impede the use of such data that we all agree – business, non-profit organizations and regulators, alike – will help people break the cycle of predatory financial services that harm consumers and slow our economy.
We look forward to continuing that dialogue.