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Over the past few decades, the financial industry has gone through significant changes. One of the most notable changes is the use of alternative credit data1 for lending. This type of data is becoming increasingly essential in consumer and small business lending. In this blog post, we’ll explore the importance of alternative credit data and the insights you can gain from our new 2023 State of Alternative Credit Data Report. Benefits and uses of alternative credit data and alternative lending Alternative credit data and alternative financial services offer substantial benefits to lenders, borrowers, and society as a whole. The primary advantage of alternative credit data is that it provides a more comprehensive and accurate credit history of the borrower. Unlike traditional credit data that focuses on a borrower’s financial past, alternative credit data includes information from non-traditional sources like rent payments, full-file public records, utility bills, and income and employment data. This additional data allows you to gain a better understanding of financial behavior and assess creditworthiness more accurately.Alternative credit data can be used throughout the loan lifecycle, from underwriting to servicing. In the underwriting phase, alternative credit data can help lenders expand their pool of potential borrowers, especially those who lack or have limited traditional credit history. Additionally, alternative credit data can help lenders identify risks and minimize fraud. In the servicing phase, alternative credit data can help lenders monitor financial health and provide relevant services and an enhanced customer experience.Alternative lending is critical for driving financial inclusion and profitability. Traditional credit models often exclude individuals who have limited or no access to credit, causing them to turn to high-cost alternatives like payday loans. Alternative credit data can provide a more accurate assessment of their ability to pay, making it easier for them to access affordable credit. This increased accessibility improves the borrower's financial health and creates new opportunities to expand your customer base. “Lenders can access credit data and real-time information about consumers’ incomes, employment statuses, and how they are managing their finances and get a more accurate view of a consumer’s financial situation than previously possible.”— Scott Brown, President of Consumer Information Services, Experian State of alternative credit data Our new 2023 State of Alternative Credit Data Report provides exclusive insight into the alternative lending market, new data sources, inclusive finance opportunities and innovations in credit attributes and scoring that are making credit scoring more accurate, transparent and inclusive. For instance, the use of machine learning algorithms and artificial intelligence is enabling lenders to develop more predictive alternative credit scoring models and enhance risk assessment.  Findings from the report include: 54% of Gen Z and 52% of millennials feel more comfortable using alternative financing options rather than traditional forms of credit.2 62% of financial institution firms are using alternative data to improve risk profiling and credit decisioning capabilities.3 Modern credit scoring methods could allow lenders to grow their pool of new customers by almost 20%.4 By understanding the power of alternative credit data and staying on top of the latest industry trends, you can widen your pool of borrowers, drive financial inclusion, and grow sustainably. Download now 1When we refer to “Alternative Credit Data,” this refers to the use of alternative data and its appropriate use in consumer credit lending decisions, as regulated by the Fair Credit Reporting Act. Hence, the term “Expanded FCRA Data” may also apply in this instance and both can be used interchangeably.2Experian commissioned Atomik Research to conduct an online survey of 2,001 adults throughout the United States. Researchers controlled for demographic variables such as gender, age, geographic region, race and ethnicity in order to achieve similar demographic characteristics reported in the U.S. census. The margin of error of the overall sample is +/-2 percentage points with a confidence level of 95 percent. Fieldwork took place between August 22 and August 28, 2023. Atomik Research is a creative market research agency. 3Experian (2022). Reaching New Heights with Financial Inclusion 4Oliver Wyman (2022). Financial Inclusion and Access to Credit

Lemon vehicle history is a serious issue that can have a significant impact on the automotive industry. Buying a vehicle that is branded as a lemon may harm a dealership or the OEM's reputation. Customers may be less likely to buy automobiles from that manufacturer or dealership in the future if they learn the vehicle they bought was branded a lemon. Used vehicles with lemon vehicle history has implications Furthermore, automakers may incur higher costs as the expense of buying back and fixing lemon vehicles is frequently the responsibility of the auto manufacturers. Finally, the used automobile market may be impacted by a vehicle's lemon history. Used cars with lemon vehicle history events are frequently worth less than equivalent autos without such activity. New lemon-reported events analysis infographic available View our most recent Vehicle Insights Infographic Report: Lemon Reported Events Data Analysis. You’ll learn more about lemon-reported activity for vehicles, what percentage of owners repurchase a different vehicle after the initial reported activity, and how many vehicles with the lemon event history are still on the road. We have a series of vehicle insight infographic reports you may also be interested in: Water and Flood Reported Events Vehicle Accident and Damage Insights  

The gig economy — also called the sharing economy or access economy — is an activity where people earn income by providing on-demand work, services, or goods. Often, it is through a digital platform like an application (app) or website. The gig economy seamlessly connects individuals with a diverse range of services, whether it be a skilled handyman for those long-awaited office shelves, or an experienced chauffeur to quickly drive you to the airport to not miss your flight. However, there are instances when these arrangements fall short of expectations. The hired handyman may send a substitute who’s ill-equipped for the task, or the experienced driver takes the wrong shortcut leaving you scrambling to make your flight on time. On the flip side, there are numerous risks faced by those working in the gig/sharing economy, from irritable customers to dangerous situations. In such cases, trust takes a hit. The gig economy has witnessed a surge in recent years, as individuals gravitate towards flexible, freelance, and contract work instead of traditional full-time employment. This shift has unlocked a multitude of opportunities for both workers and businesses. Nevertheless, it has also ushered in challenges pertaining to security and trust. One such challenge revolves around the escalating significance of digital identity verification within the gig economy.  Digital identity verification and the gig economy  Digital identity verification encompasses validating a person's identity through digital means, such as biometric data, facial recognition, or document verification. Within the gig economy, this process has high importance, as it establishes trust between businesses and their pool of freelance or contract workers. With the escalating number of remote workers and the proliferation of online platforms connecting businesses with gig workers, verifying the identities of these individuals has become more vital than ever before.  Protecting gig users and improving the customer experience   One primary rationale behind the mounting importance of digital identity verification in the gig economy is its role in curbing fraud. As the gig economy gains traction, the risk of individuals misrepresenting themselves or their qualifications to secure work burgeons. This scenario can lead businesses to hire unqualified or even fraudulent workers, thereby posing severe repercussions for both the company and its customers. By adopting digital identity verification processes, businesses can ensure the legitimacy and competence of their workforce, subsequently decreasing the risk of fraudulent activities.  In the digital age, trust and safety are crucial for businesses to succeed. Consumers prioritize brands they can trust, and broken trust can lead to loss of customers.According to Experian's 2023 Fraud and Identity Report, over 52% of US consumers feel they’re more of a target for online fraud than they were a year ago. As such, online security continues to be a real concern for most consumers. Nearly 64% of consumers say that they are very or somewhat concerned with online security, with 32% saying they are very concerned. Establishing trust and safety measures not only protects your brand but also enhances the user experience, fosters loyalty, and boosts your business.    Role of a dedicated Trust and safety team  Trust and safety are the set of business practices for online platforms to follow to reduce the risk of users being exposed to harm, fraud, or other behaviors outside community guidelines. This is becoming an increasingly important function as online platforms look to protect their users while improving customer acquisition, engagement, and retention.  That team also safeguards organizations from security threats and scams. They verify customers' identities, evaluate actions and intentions, and ensure a safe environment for all platform users. This enables both organizations and customers to trust each other and have confidence in the platform. Their role has evolved from fraud prevention to encompass broader areas, such as user-generated content and the metaverse. With the rise of user-generated content, platforms face challenges like fake accounts, imitations, malicious links, and inappropriate content. As a result, trust and safety teams have expanded their focus and are involved in product engineering and customer journey design. Another noteworthy factor contributing to the growing emphasis on digital identity verification for trust and safety teams stems from the necessity to adhere to diverse regulations and laws. Many countries have implemented stringent regulations to safeguard workers and ensure the legal and ethical operations of businesses. In the United States, for instance, businesses must verify the identities and work eligibility of all employees, including freelancers and contractors, as part of the Form I-9 process. By leveraging digital identity verification tools, businesses can streamline these procedures and guarantee compliance with prevailing regulations.  Mitigating risk in online marketplaces  To mitigate risks in online marketplaces, businesses can take several steps, including creating a clear set of user guidelines, implementing identity verification during onboarding, enforcing multi-factor authentication for all accounts, leveraging reverification during high-risk moments, performing link analysis on the user base, and applying automation. Online identity verification plays a pivotal role in safeguarding gig workers themselves. With the surge of online platforms connecting businesses with freelancers and contractors, there comes an augmented risk of workers falling prey to scams or identity theft. By mandating digital identity verification as an integral part of the onboarding process, these platforms can shield workers and ensure they only engage with bona fide businesses.  While automation can be a powerful tool for fraud detection and mitigation, it is not a cure-all solution. Automated identity verification has its strengths, but it also has its weaknesses. While automation can spot risk signals that a human might miss, a human might spot risk signals that automation would have skipped. Therefore, for many companies, the goal should not be full automation but achieving the right ratio of automation to manual review. Manual review takes time, but it's necessary to ensure that all potential risks are identified and addressed. The more efficient these processes can be, the better, as it allows for a quicker response to potential threats. As the number of individuals embracing freelance and contract work surges, and businesses increasingly rely on these workers to carry out vital responsibilities, ensuring the security and trustworthiness of these individuals becomes paramount. By integrating digital identity verification processes, businesses can shield themselves against fraud, comply with regulations, and cultivate trust with their gig workers.  Finding the right partner While trust and safety are concerns for all online marketplaces, there’s no universal solution that will apply to all businesses and in all cases. Your trust and safety policies need to be tailored to the realities of your business. The industries you serve, regions you operate in, regulations you are subject to, and expectations of your users should all inform your processes. Experian’s comprehensive suite of customizable identity verification solutions can help you solve the problem of trust and safety once and for all.  Learn more *This article leverages/includes content created by an AI language model and is intended to provide general information.