Experian Finds 89% of Lenders Believe Alternative Credit Data Improves Consumers’ Financial Access to Finding Credit During COVID-19 Pandemic


COSTA MESA, Calif .– (COMMERCIAL THREAD) – As part of its mission to use data to keep the credit economy open to more consumers, Experian® today released its latest Alternative credit data status report. The study highlights consumer and lender perceptions of using alternative credit data in the context of COVID-19, revealing that 80% of consumers believe the inclusion of items such as payment history utilities or cell phones would have a positive impact on their credit score and nearly 90% of lenders believe the alternative credit data allows them to extend credit to more consumers.

The Experian report also found that 69% of consumers are worried about their finances and that one in five plans to open a credit card within the next six months. At the same time, 96% of lenders believe that using alternative credit data allows them to more accurately assess the creditworthiness of consumers in times of economic crisis.

“There is no doubt that COVID-19 has created a difficult economic reality for millions of Americans. As we think about the economic recovery, all of us in the financial services industry must work together to support consumers and maintain the integrity and openness of the credit market, ”said Greg Wright, Executive Vice President and Chief product for Experian Consumer Information Services. “Incorporating alternative and consumer-enabled data attributes into decision-making processes enables lenders to responsibly extend credit while helping consumers access the financial services they need in today’s economic environment and beyond.

Alternative credit data, sometimes referred to as FCRA-regulated extended credit data, refers to information that is not traditionally included in credit reports. Incorporating alternative credit data into credit decisions can help consumers with limited or no credit history access financial services while providing a clearer picture of a potential borrower’s creditworthiness.

Additional findings from the State of Alternative Credit Data report include:

  • Three in four consumers think they are a better borrower than their credit rating represents

  • If given a choice, most consumers would prefer other sources of credit data – such as utility bill payment history (84%), cell phone payment history (83%). ) and rental payment history (80%) – are assessed in their credit history.

  • 80% of consumers would likely share various types of financial information with lenders if it meant increased chances of approval or improved interest rates on credit

  • 74% of consumers think it would be more convenient to give lenders access to their financial data through their bank account than to provide paper documents

Methodology of the survey

Experian conducted two nationwide online surveys of credit providers and consumers regarding attitudes, awareness, and use of alternative credit data.

For the survey of lenders, 136 partial and complete responses were collected from representatives of financial institutions who are responsible for choosing their organization’s data services. The survey of financial institutions was conducted in April 2020.

For consumer results, Experian conducted a nationwide online survey of 504 respondents who planned to apply for credit within the next three months, with survey invitations balanced with the U.S. Census. The consumer survey was conducted May 1-5, 2020.

To learn more about alternative credit data, please visit: https://www.experian.com/consumer-information/alternative-data.

About Experian

Experian is the world leader in global information services. During life’s greatest moments – from buying a house or a car to sending a kid off to college to growing a business by connecting with new customers – we make it possible consumers and our customers to manage their data with confidence. We help individuals take financial control and access financial services, businesses make smarter decisions and prosper, lenders lend more responsibly, and organizations prevent fraud and identity crime.

We employ 17,800 people in 45 countries and we invest every day in new technology, talented people and innovation to help all of our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are part of the FTSE 100 index.

Learn more at www.experianplc.com or visit our global content hub on our global news blog for the latest news and information from the Group.

Experian and the Experian trademarks used herein are trademarks or registered trademarks of Experian and its affiliates. Other product and company names mentioned in this document are the property of their respective owners.

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