Americans who don’t have a FICO score present both an opportunity and a challenge for lenders.
Lenders are keen to extend credit to consumers in new market segments, but need to ensure they’re making risk-aware decisions. Some lenders are asking can scoring trended data, or more accurately, trended credit bureau data, as some credit score companies claim, actually help expand credit access to these consumers? The short answer is no.
Recently in Housingwire, I dove into why that is the case and discussed the differences between “trended data” and “alternative data” in enabling lenders to safely and responsibly extend credit to more people.
Read more about why credit scoring models that use trended data alone can’t help open the credit box at: https://www.housingwire.com/blogs/1-rewired/post/41998-can-scoring-trended-data-help-lenders-expand-credit-access
