Roughly 76 million Americans face challenges accessing credit. This is because they are either thin files, meaning that they have four or less credit accounts on their file, or they are credit invisible, which means they do not have a traditional credit file. Credit invisibility can be costly; in fact, a subprime credit score can cost an individual an extra $32,923 in interest on an average 30-year mortgage compared to a prime score.
There are ways to help move more Americans into scorable credit bands. Equifax is an example of a company that focuses on aiding Americans in this task. To do so, it leverages alternative data, such as utility/telco data and speciality finance data. With consumer telco or utility data, 6.5 million Americans would be able to move into the scorable band, and with specialty finance data, an additional 1.9 million people would become scorable.
Many Americans face high costs due to credit invisibility. Finding ways to support individuals in entering a scorable band is important in building financial opportunity.
Infographic by: equifax
