Experian to Offer Credit Score for Thin Credit Consumers
Credit reporting bureau Experian said this week that with the help of EBureau it plans to roll out its own credit scoring model referred to as the “Emerging Credit Score”.
The new credit score is aimed at helping thin-file and no-file consumers obtain credit more easily while allowing lenders to provide financing to an untapped population.
According to the FDIC, this segment represents 19.4 percent of all households in the United States, or roughly 72.7 million people, and accounts for $1.1 trillion in annual income.
Experian says its’ new scoring model has two purposes, to help those in need of credit get approved more easily, and allow creditors to access more information about potential borrowers.
The Emerging Credit Score will help those with little or no credit history by tapping into less traditional measures such as demographics, internet/catalog purchases, property and asset records, utility data, and public records.
The score is intended to be useful for all types of banks and lenders, including credit unions, auto financiers, credit card issuers, mortgage lenders, health care providers, and others.
This may turn out to be a helpful addition to the existing credit scoring models that rely upon traditional lines of consumer credit such as credit cards and mortgages to gather data that some consumers may choose not to utilize.
(photo: pesotum)
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Posted Under: Credit News