PERC released a new report today that highlights the growing consensus on the credit market impacts of using alternative data. PERC’s report Research Consensus Confirms Benefits of Alternative Data synthesizes findings from a diverse group of studies conducted by the private sector and other research organizations.

Among key findings are the following conclusions from studies examined:

• Credit Invisibility (either not having a credit report or having too little information to generate a score) affects tens of millions of Americans;

• Non-financial payment data (such as from gas, water, electric, cable TV, broadband, wireline and wireless telephone) that is fully reported (both timely and late payment data) and other alternative data are predictive of financial payment data based upon the actual experience of millions of Americans over time;

• Financial inclusion increases overall, especially for lower income Americans and members of minority communities, when fully reported non-financial payment data and other alternative data is available to lenders; and
  
  
• Including alternative data greatly reduces Credit Invisibility, enabling many to begin building a credit history, accessing low limit, mainstream credit, and protecting themselves against credit they cannot afford.