Tag: state of alternative credit data

Big data is bringing changes to the way credit scores are reported and making it easier for lenders to find creditworthy consumers, and for consumers to qualify for the financing they need. Since last year’s annual report, alternative credit data1 has continued to gain in popularity. In Experian’s latest 2020 State of Alternative Credit Data report, we take a closer look at why alternative credit data is supplemental and essential to consumer lending and how it’s being adopted by both consumers and financial institutions. While the topic of alternative credit data has become more well known, its capabilities and benefits are still not widely discussed. For instance, did you know that … 89% of lenders agree that alternative credit data allows them to extend credit to more consumers. 96% of lenders agree that in times of economic stress, alternative credit data allows them to more closely evaluate consumer’s creditworthiness and reduce their credit risk exposure. 3 out of 4 consumers believe they are a better borrower than their credit score represents. Not only do consumers believe they’re more financially astute than their credit score depicts – but they’re happy to prove it, with 80% saying they would share various types of financial information with lenders if it meant increased chances for approval or improved interest rates. This year’s report provides a deeper look into lenders’ and consumers’ perceptions of alternative credit data, as well as an overview of the regulatory landscape and how alternative credit data is being used across the lending marketplace. Lenders who incorporate alternative credit data and machine learning techniques into their current processes can harness the data to unlock their portfolio’s growth potential, make smarter lending decisions and mitigate risk. Learn more in the 2020 State of Alternative Credit Data white paper. Download now

The universe has been used as a metaphor for many things – vast, wide, intangible – much like the credit universe. However, while the man on the moon, a trip outside the ozone layer, and all things space from that perspective may seem out of touch, there is a new line of access to consumers. In Experian's latest 2019 State of Alternative Credit Data report, consumers and lenders alike weigh in on the growing data set and how they are leveraging the data in use cases across the lending lifecycle. While the topic of alternative credit data is no longer as unfamiliar as it may have been a year or two ago, the capabilities and benefits that can be experienced by financial institutions, small businesses and consumers are still not widely known. Did you know?: -  65% of lenders say they are using information beyond the traditional credit report to make a lending decision. -  58% of consumers agree that having the ability to contribute payment history to their credit file make them feel empowered. -  83% of lenders agree that digitally connecting financial account data will create efficiencies in the lending process. These and other consumer and lender perceptions of alternative credit data are now launched with the latest edition of the State of Alternative Credit Data whitepaper. This year’s report rounds up the different types of alternative credit data (from alternative financial services data to consumer-permissioned account data, think Experian BoostTM), as well as an overview of the regulatory landscape, and a number of use cases across consumer and small business lending.     In addition, consumers also have a lot to say about alternative credit data:   With the rise of machine learning and big data, lenders can collect more data than ever, facilitating smarter and more precise decisions. Unlock your portfolio’s growth potential by tapping into alternative credit data to expand your consumer universe. Learn more in the 2019 State of Alternative Credit Data Whitepaper. Read Full Report View our 2020 State of Alternative Credit Data Report for an updated look at how consumers and lenders are leveraging alternative credit data.