Alternative credit data looks beyond traditional credit data, which typically focuses on long-established credit activities. These expanded credit insights, when paired with traditional credit behaviors, deliver a more comprehensive view into a consumer's creditworthiness.
Using scoring models and attributes which tap into proven and reliable sources of alternative credit data allows you to:
Extend better offers
Improve credit decisions on the margin by more
effectively evaluating borderline applicants.
Grow approval rates
Identify off-margin consumers underestimated
by traditional credit scores.
Expand your addressable market
Seize opportunities to turn credit invisibles — both
thin-file and no-file consumers — into valuable customers.
Improve booking rate and profitability
Extend more accurate pricing and terms to consumers across the credit spectrum who have been misclassified by traditional credit assessments.
Monitor changes across the customer lifecycle.
Enhance portfolio management process
Alternative credit data goes beyond traditional credit data to deliver a broader, more comprehensive picture of consumer creditworthiness and associated risk. Non-traditional data like professional licenses, asset ownership and public records can help bridge the gap when paired with traditional credit data.
Alternative Credit Data Impact Report
A study of the adoption, utilization and impacts of alternative data
Impact of Alternative Data Report Infographic
Gain a better understanding of alternative data adoption and usage trends
Alternative Consumer Data: What You Should Know
How financial inclusion in consumer lending can be achieved using alternative credit data.
A New Perspective on Small Business Lending
Lenders are turning to alternative credit data to gain additional insights to fuel portfolio growth.
“84% of respondents use alternative credit data in marketing and credit risk assessment across the customer lifecycle.”
LexisNexis Risk Solutions delivers a comprehensive report on the state of alternative data usage across the lending ecosystem. 225 financial institutions were surveyed, collecting responses from banks, credit unions, non-bank lenders and fintech organizations to gain insights on how alternative data is being leveraged in lending decisions, origination strategies and prescreen marketing.
Financial inclusion, increased visibility and improved segmentation are driving adoption of alternative credit data
Alternative credit data is driving meaningful business impacts
Overall satisfaction with alternative
data is high, though some challenges and barriers remain
The top drivers of alternative data adoption
Benefits of incorporating alternative data and its impacts on revenue growth
Challenges that may be limiting adoption rates
Fostering Financial Inclusion with Alternative Data
It’s time to take an alternative look at financial inclusion.
20% of U.S. consumers have little to no credit footprint using only tradeline credit indicators, but many may actually meet lenders’ risk standards.1 Many in this diverse group are eager to access credit products and services but are too often underestimated by traditional credit scores.
Alternative data can help fill the gaps in credit history to present a more robust view of creditworthiness—allowing lenders to more accurately assess consumer credit risk, expand addressable markets and extend new financial opportunities to historically underserved populations.
Shifting Perspectives on Financial Inclusion
Building financial inclusion strategies that drive revenue and increase customer opportunity.
Alternative data insights can open a new path to inclusion and opportunity.
Historically, marginalized communities have consistently lower rates of credit scorability with traditional credit scores. Augmenting traditional credit scores with alternative credit data can help lenders build a more complete picture of creditworthiness.
Implementing alternative data into credit risk assessment can help lenders better serve overlooked creditworthy individuals and turn thin- or no-file consumers into valuable customers.
Alternative data could help financial institutions drive meaningful inclusion in underserved communities2.
Lower rates of credit scorability
Only 68% of African American and
73% of Hispanic communities are
scorable using traditional credit data
Expand scorable consumers
Evaluate 28% more African American
and 22% more Hispanic consumers
by leveraging alternative data
Gain greater clarity
23% boost in ability to score and
evaluate traditionally unscorable
1. LexisNexis Risk Solutions Information Hub, 2021
2. LexisNexis Risk Solutions RiskView Financial Inclusion eBook
Gain Unprecedented Insight into Risk
Unlock a more robust view of consumer creditworthiness.
Traditional credit scores have long been a strong indicator of consumer credit risk — but in today’s shifting economic environment, lenders need fresh tools to drive portfolio growth and stay competitive.
Alternative data can be used to augment tradeline credit indicators, uncovering hidden risk factors that traditional credit data might miss. Using alternative data can give lenders the nuanced insights they need to improve consumer segmentation, provide more competitive terms and limit exposure to risk.
Enhance your credit risk assessment.
Alternative data allows lenders to sharpen segmentation based on the conventional broad categories — such as near prime, prime and super prime — into granular subgroups wherein credit scores fall within 20-30-point ranges.
Leveraging additional insights can allow lenders to uncover notable differences among consumers within the same traditional credit tier and thus make better decisions suited to the individual applicant.
of consumers being in
a more prime score band1
of consumers being in
a less prime score band1
The benefits of an expanded view of risk.
Gain greater visibilityinto changing credit risk
Better serve consumers withimproving financial situations
Identify evolving risk factorsand mitigate exposure
Attract and retain moreprofitable accounts
Boost booking rates and averagecustomer lifetime values
Increase your competitive edge
1. LexisNexis Risk Solutions RiskView Refining Prime eBook