White Papers

Making the Credit Invisible, Visible

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'1d:anOI tlCS@ a Symantec company Making the credit invisible, visible: A study on the benefits of alternative credit data Introduction The plight of the credit invisible consumer and their ability to access traditional financial services has been under a microscope for the past several years. Credit invisibles are consumers whose credit histories have potentially rendered them 'unscorable' in the eyes of the three nationwide credit reporting agencies (NCRAs). The Consumer Financial Protection Bureau (CFPB) released several studies on this topic, and legislators have advocated for greater financial inclusion. There is a strong commitment in the United States to make the credit invisible, 'visible' to promote financial inclusion and spur economic growth. Recent CFPB Data Point reports introduced a new angle to this topic - the pe istent unsco ble - consumers whose demographics suggest they may struggle with credit visibility throughout their lifetime. While many younger credit invisibles ultimately 'outgrow' their invisible status, this group has difficulty establishing a credit profile and experiences sustained credit invisibility. ID:A Labs, the research arm for ID Analytics, has been researching credit invisibles for nearly a decade and sought to better understand this new phenomenon. We conducted a study based on findings from the most recent CFPB reports to determine (1) the challenges faced by the demographics identified as persistently unscorable, (2) the application patterns of this group, and (3) how alternative data can help the most challenged credit invisible consumers gain access to credit.

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