Opening the Doors of Financial Opportunity for Millions of Americans

Millions of Americans utilize lines of credit to ensure financial stability for themselves and their families. However, the traditional credit file only offers a limited look into the lives of consumers, making it difficult for many to obtain a credit score. In order to combat this, alternative data is starting to become a key component of determining financial reliability.

Some significant examples of alternative data are specialty finance data, telco, and utility data. Studies show that over 90% of Americans have a utility bill. This means that considering this data when determining a credit score could change the game for previously unscorable consumers. The most common groups of people that suffer from thin or invisible credit are young people or those with extenuating personal circumstances. This equates to roughly 76 million Americans, emphasizing the need for a change.

Incorporating both AI and alternative data into the world of credit can help incremental populations of people to enter scorable credit brackets. This will increase financial opportunity for many, as well as alleviate stress that often comes with financial instability or uncertainty. Although traditional credit reports are still a solid indicator of reliability, we can now support a more inclusive economy with the help of alternative data.