Experian has announced the launch of Emerging Credit Score, a new credit scoring tool developed with eBureau designed to assist lenders in evaluating the creditworthiness of unbanked and underbanked consumers.
"The unbanked and underbanked consumer population presents an expanding market opportunity for financial services institutions, particularly in today's economic environment," said Zaydoon H. Munir, senior vice president, Experian. "Our goal has always been twofold: to help underbanked consumers get the credit and affordable financial services they deserve and to provide our clients that serve these consumers with the best risk-management tools. Utilizing this groundbreaking new scoring method, lenders can now effectively -- and equitably -- lend to this population and grow their customer base." "eBureau is excited to partner with Experian on the development and implementation of Emerging Credit Score, an alternative credit score for thin-file and no-file consumers," said Mark Doman, executive vice president, eBureau. "Our next-generation technology provides Experian and its financial services clients with a powerful new scoring tool to profitably serve a number of growing, underserved consumer segments."
Through the partnership, Emerging Credit Score will rely on the aggregation of Experian's traditional credit data and eBureau's alternative consumer credit, payment and identity data. Using eBureau's eScore technology, the score will evaluate the purchase and payment histories of consumers with little or no credit history, providing an increasingly granular view of the thin-file and no-file consumer segment. By scoring a higher percentage of consumers, Emerging Credit Score helps credit grantors grow their customer base by effectively qualifying more prospects within this underserved population.
According to recent statistics released by the Federal Deposit Insurance Corp., there are an estimated 28 million no-file and 44.7 million thin-file consumers in the United States, representing 19.4 percent of all households. These combined populations earn approximately $1.1 trillion in annual income, with underserved individuals accounting for nearly half of that total.
Emerging Credit Score is the first solution in the market addressing the underserved consumer that couples alternative data with the breadth and quality of Experian's traditional credit data. Experian's delivery approach distinctly offers an integrated solution that eases implementation and minimizes operational impact on clients' existing systems and decisioning processes. Clients can rely on Experian to support their growth strategies in a disciplined fashion, giving them a more holistic perspective of a consumer's financial relationships. In effect, this highly predictive risk score optimizes the ability to effectively expand the universe of underserved applicants and prospects as these consumers gain momentum in their pursuit of affordable financial services.