Alternative Data Across the Loan Life Cycle: Credit for More, Visibility for All

Alternative data may help lenders better identify good credit risks and fend off fraudsters.

Boston, January 22, 2019 – Lenders are continuously searching for good credit risks, but a substantial share of the U.S. adult population either lacks a credit score or has a score below the prime threshold. And some borrowers may take on financial obligations not captured in a traditional file, making them worse risks than their credit report reflects. Can alternative data sources help lenders offer credit to consumers who would otherwise be turned down while also helping them screen out fraudsters and collect on loans?

This report provides an overview of the types of alternative data available to lenders, how lenders use such alternative data, and the opportunities and challenges alternative data presents to lenders. It is based on 15 in-depth interviews that Aite Group conducted in September and October 2018 with alternative data vendors and lenders in the United States. It also contains analysis from a 2018 Aite Group survey of 22 U.S. retail credit executives from banks, credit unions, finance companies, and fintech lenders.

This 24-page Impact Report contains eight figures and two tables. Clients of Aite Group’s Retail Banking & Payments service can download this report, the corresponding charts, and the Executive Impact Deck.

This report mentions Clarity Services, DataX, Envestnet Yodlee, Equifax, Experian, FactorTrust, FICO, Finicity, ID Analytics, LexisNexis Risk Solutons, National Consumer Telecom & Utilities Exchange, Plaid, RentBureau, RentTrack, Rent Reporters, Socure, TransUnion, and VantageScore Solutions.

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