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The credit bureau’s Extended View Score pairs data from rental agreements and public records with core credit information to generate a report for consumers with thin-to-no credit files.
Core credit data, which includes items like credit-to-utilization ratios or payment histories, will be analyzed differently than it would be if appearing on a traditional credit report.
“We’re looking at a trended view of the consumer,” Steve Wagner, president of consumer information for Experian, explains. For instance, instead of looking at whether a person has 50% of their available credit open, the Extended View Score would consider how much their basic utilization has increased over the last few months.
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Experian estimates, using its new score, 30% of consumers would have an easier time securing better rates on loans from mainstream lenders. This Extended View Score is currently only be marketed to the lending community, but the bureau may make a version available to the public down the road.
“We would very much like to provide it to the consumer, but, first, lenders have to use it,” Wagner says.
The bureau remains hopeful it can achieve mainstream adoption through existing relationships with issuers and data furnishers.
“[Bank clients] want to lend to consumers, but they want to do so responsibly,” Wagner says. “Only someone in our position can make it easy.”
According to Wagner, 15 lenders have expressed interest in using Extended View following its formal debut yesterday. He says consumers can help promote use of the product by asking lenders whether it is available as an alternative.
Even without the consumer push, the timing may be right for alternate credit score. The un-and-underbanked have become somewhat of a hot commodity with major financial institutions over the last year with American Express, BBVA Compass Bank and, most recently, Chase launching products targeted to those without traditional bank accounts.
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Image: Laineys Repertoire, via Flickr
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