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Experian is all about turning insights into action… using data for good. Our commitment is to work with our clients, consumers, non-profits and other parties to help ensure that we, as a company and within society, continue to properly leverage big data for good. As part of that effort, each week we bring you Experian Insights – a round-up of news and resources highlighting how data is used for positive business, consumer and societal actions in many ways and across multiple sectors. Experian Insights in the News The One Thing That Could Instantly Make Your Credit Score Better – Time If both rent and utilities were part of credit scores as many as 54 million people (who are essentially invisible today) would be able to participate in mainstream finance. [Tweet] Five Minutes with Matt Seeley, EMS Group President – The Hub We're working with numerous clients to help guide their organization's data management strategy, putting insights into action to create improved and more meaningful customer interactions. [Tweet] Small Business Insights Drive Action for the Good of the Economy – Experian Blog Small businesses rounded out 2014 performing at a very high level, especially in terms of credit health. [Tweet] Agencies Navigate the Identity-Based Security Ecosystem – GCN Identity systems have become the top priority for organizations looking to safeguard government data from attackers. [Tweet] Experian's Newest CMO Aims to Focus on Consumers – AdAge.com Kristen Simmons will lead strategic direction, development and execution of marketing for Experian consumer services in North America. [Tweet] How Millions of Consumers Could Get Credit for Paying Their Utilities on Time – Experian Blog Study analyzed the financial benefits for consumers by adding positive, monthly utility or rental payments to credit reports. [Tweet] Jump-Starting Car Sales from the Service Lane – Automotive News Automotive News reports how VehicleXchange works with Experian to help car dealers find credit-worthy customers. [Tweet] 5 Tools for Improved Identity Management – GCN Government agencies will have to rely on improving existing technology solutions to help manage their ongoing security threats. [Tweet] Acting on Insights to Create Value for Marketers and Their Customers – Experian Blog Learn how successful businesses are drawing meaningful insights from data to impact almost every aspect of business operations. [Tweet] Subscribe to this blog by email to learn more about our data and analytics.
Experian is all about turning insights into action… using data for good. Our commitment is to work with our clients, consumers, non-profits and other parties to help ensure that we, as a company and within society, continue to properly leverage big data for good. As part of that effort, each week we bring you Experian Insights – a round-up of news and resources highlighting how data is used for positive business, consumer and societal actions in many ways and across multiple sectors. Experian Insights in the News The One Thing That Could Instantly Make Your Credit Score Better – Time If both rent and utilities were part of credit scores as many as 54 million people (who are essentially invisible today) would be able to participate in mainstream finance. [Tweet] Five Minutes with Matt Seeley, EMS Group President – The Hub We're working with numerous clients to help guide their organization's data management strategy, putting insights into action to create improved and more meaningful customer interactions. [Tweet] Small Business Insights Drive Action for the Good of the Economy – Experian Blog Small businesses rounded out 2014 performing at a very high level, especially in terms of credit health. [Tweet] Agencies Navigate the Identity-Based Security Ecosystem – GCN Identity systems have become the top priority for organizations looking to safeguard government data from attackers. [Tweet] Experian's Newest CMO Aims to Focus on Consumers – AdAge.com Kristen Simmons will lead strategic direction, development and execution of marketing for Experian consumer services in North America. [Tweet] How Millions of Consumers Could Get Credit for Paying Their Utilities on Time – Experian Blog Study analyzed the financial benefits for consumers by adding positive, monthly utility or rental payments to credit reports. [Tweet] Jump-Starting Car Sales from the Service Lane – Automotive News Automotive News reports how VehicleXchange works with Experian to help car dealers find credit-worthy customers. [Tweet] 5 Tools for Improved Identity Management – GCN Government agencies will have to rely on improving existing technology solutions to help manage their ongoing security threats. [Tweet] Acting on Insights to Create Value for Marketers and Their Customers – Experian Blog Learn how successful businesses are drawing meaningful insights from data to impact almost every aspect of business operations. [Tweet]
It seems like every conversation I have regarding how the U.S. economy is doing, I always think about small businesses. After all, small businesses are what drive our economy forward. They are the center of commerce for our country, and create the most jobs for our growing workforce. Quite honestly, without them, who knows where our country would stand today. With that said, how are small businesses really doing? Well, according to the Experian/Moody’s Analytics Small Business Credit Index, small businesses rounded out 2014 performing at a very high level, especially in terms of credit health. Small businesses improved their payment and credit management behavior across the board, increasing their average risk score, reducing the number of days they paid bills past due and lowering delinquency rates. The end of 2014 also saw a decrease in the number of businesses that filed for bankruptcy. Simply put, small businesses fared well at the end of last year. What does this mean in the grand scheme of things? For lenders and suppliers, the continued improvement in payment and credit management performance by small businesses is a welcomed sign. It enables them to feel more confident when extending credit. Understanding these trends give lenders the insight needed to make more informed decisions on loan terms, interest rates and credit limits. On the other side of the spectrum, small businesses have positioned themselves to gain access to a wider availability of credit than several years ago. Staying on top of their payment performance will be critical, as it can open up the credit spigot for years to come. Gaining insight into how lenders and suppliers perceive a small business’s risk, enables owners to understand the areas they need to improve on. At Experian, we’re committed to helping lenders, suppliers and small businesses alike, understand these data points, and turn them into actionable insights to help them move their businesses forward and grow. Enabling our clients to use this data for good and create new opportunities is at the core of everything we do. At the end of the day, the continued improvement in small business credit health is a positive for all parties involved. It enables lenders to feel more confident that they will receive payment on loans they’ve extended, and small businesses will have access to capital that helps them grow and succeed. And when small businesses succeed, it has a very positive affect on our economy.
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.