Description: This report highlights the findings of two previous PERC studies, Give Credit Where Credit is Due: Increasing Access to Affordable Mainstream Credit Using Alternative Data and You Score, You Win: the Consequences of Giving Credit Where Credit is Due. This report specifically focuses on the new to credit consumer population and how their ability to obtain credit is increased through the reporting of alternative data. Substantial research supports the premise that alternative data tradelines help to incorporate a class of credit underserved consumers into mainstream finance by providing enough data to achieve a credit score. New PERC research shows that using alternative data in underwriting does not negatively affect consumer credit scores over time, and does not lead to above average levels of over-extension in the new-to-credit population. Additionally, PERC research shows that the inclusion of alternative data in credit files is most likely to help minority and low-income consumers achieve credit scores and obtain access to affordable mainstream credit, a key step in the asset building process.
Author Name: Michael A. Turner, Ph.D., Patrick Walker, M.A. and Katrina Dusek, M.A.
Organization Type: Nonprofit
