By ID Analytics - Alternative Data for Credit Decisioning: A Primer

The U.S. market has developed into a world of credit haves and have nots. The “haves” are those who are deemed creditworthy and have credit. The “have nots” are those who do not qualify for credit because their credit history is limited or nonexistent. Nearly 20 percent of U.S. consumers are credit invisible. What can be done to render the unbanked and underbanked visible?

Imagine a tool to scour rejected applications for creditworthy prospective customers who did not meet traditional credit bureau underwriting standards or to dip into the lower credit tranches to stratify risk and offer credit products priced accordingly. Alternative credit data represents an opportunity for lenders and merchants to improve the accuracy of their underwriting models and expand the world of credit to candidates who warrant consideration.

 In this research brief, Mercator Advisory Group covers:

  • An overview of credit underwriting
  • The types of alternative data available 
  • How alternative data can be applied to real-life credit scenarios to find creditworthy prospective customers

Download the research brief here.