Alternative data describes individuals’ financial history that’s unincluded on credit reports. It includes bank transaction data, rental payments, and telcom and utility bill information, among other forms of financial history, and these forms of consumer-permissioned data can drastically boost credit stability.
Currently, 20% of American adults lack the alternative data they need to maintain a healthy credit score. Other numbers that reflect waning American credit include 63 million Americans being unbanked or underbanked, 92 million Americans having little-to-no credit history, 67 million adults having a “thin” credit file (less than four accounts), and 25 million being considered credit invisible.
Alternative data, and harnessing its power, could transition 20 million American adults into stable credit statuses. More specifically, 21% of invisible or credit thing consumers may become scorable, 18% could qualify for primer or near-prime offers, and 4% could qualify for subprime offers. This monumental shift would reverse America’s current credit score dilemma and it all starts with delving deeper into our financial history.
By coming to see financial history as a tool, not stagnant data, consumers can resurrect their credit, lower interest rates on personal loans, and reduce premiums for home, rental, and auto insurance. To do so, turn to bank transactions, rental payments, and telcom and utility ill history. Bank transaction data could reduce the population of those with unsocreable credit by 50%. Renal payments are an underrated mechanism for building credit history, and many landlords check them for credit verification in the leasing process.
With consumer-consented telecom and utility bill data being presented, nearly 7.5 million U.S. adults could rise from unscorable credit to prime or near-prime statuses. Insights extracted from individuals’ financial history, can propel them into a more prosperous financial future.
Leverage the value of alternative data for the sake of your credit, protection from financial injury, and wealth accruement in the long run.
