The consumer credit marketplace functions fairly efficiently for eighty percent of the U.S. adult population. But for those low and moderate income individuals who do not have a credit score, their “thin file” is a barrier to participation in the mainstream economy. It is estimated that 50 million individuals are limited in their access to credit and capital, primarily because they lack the information in their credit files that can generate a credit score. This impedes lenders’ ability to make credit decisions that can enable persons to buy a home, car, get a job, insurance or obtain capital for a business venture.
This current state presents challenges and opportunities for the utility, telecommunications, cable and financial industries. How can we enhance more people’s access to the capital that will enable them to build wealth and, in turn, become better customers and consumers of products and services?
These are the issues and questions which will be addressed in the Roundtable on Using Alternative Data Sources in Credit Scoring organized by Asset Builders, Inc. and hosted by the Brookings Urban Markets Initiative.