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Alternative consumer credit data offers information about consumers, specifically credit applicants, that does not appear on traditional credit reports. This information includes things like utility payments, telecom payments, banking account transactions (savings and checking), Netflix payments, rental payments, and similar types of recurring monthly payments that do not appear on standard credit reports.
The information contained on alternative consumer credit reports can be instrumental in helping people who are “underbanked” or who utilize traditional credit sparingly, also known as “thin file” applicants get the credit they deserve rather than what nameless faceless bureaus suggest they warrant. It can also help businesses gain access to new credit customers that would otherwise be unavailable to them. Here’s what you need to know about alternative consumer credit data and what it can mean for your business.
The world is changing and big data means financial institutions can dive deeper into a consumer’s credit use and spending habits. Using alternative consumer credit information to make credit decisions for your business can offer you a wider customer base to draw from, the opportunity to make better-informed decisions about extending credit. As more businesses embrace the options alternative credit reporting affords, it will become increasingly necessary for other businesses to come on board or get left behind by more forward-thinking competitors.