Supporting an Inclusive Economy With Alternative Data

In a time when financial literacy is one of the most important skills, expanding access to credit can be a game changer. Alternative data may be the key to achieving this, as it can provide a broader view of consumer behavior to help both businesses and customers. This type of data can highlight details often excluded from the traditional consumer credit file, allowing for more people to create and maintain a credit score. 

Examples of alternative data include finance data, telco, and utility data. These pieces of information can give visibility to otherwise invisible credit holders. People who are new to credit, have recently immigrated, or are recently divorced are just a few groups that may have a thin credit file. Alternative data can allow these people to become scorable, opening new doors to financial opportunity. In fact, with telco data alone, many individuals experienced positive credit score changes as high as 25 points.

Although traditional credit reports are still a strong indicator of credit history and financial reliability, alternative data will help to support a more inclusive economy. Moving up to 8.4 million more consumers into scorable credit bands, alternative data may be the future of mass financial success.