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The amount of data being generated nowadays is staggering. In fact, according to one source, more data has been produced in the past two years than ever before. Certainly Experian has made it our business to understand all of this data and how to harness it. I’ve recently had the opportunity to consider the impact of data in Formula 1 Racing, the most prestigious and high-tech racing series on the planet. Experian is a sponsor of Williams Martini Racing, which is one of the “big four” teams in the sport and has produced 16 Formula One World Championship titles. In F1, information is used to provide innovation and engineering expertise that creates the world’s fastest and most powerful cars. One the most fascinating elements of the F1 experience is to see what happens in the Williams Martini garage during a race. A team of master technicians watch several monitors and track an overwhelming amount of real-time data during the race – from minute details about the car, to changing weather conditions, to information about all the other race cars. Then these highly trained racing engineers instantaneously analyze the data and provide it to the pit crew and the driver in order to make the best possible decisions to win. There is a parallel to what we’re doing at Experian and our Information Services business. A team like Williams Martini Racing consistently puts a competitive car on the track year after year because of its ability to analyze technical data and improve its chances of winning. This is exactly what Experian does for our clients. We constantly push the envelope by developing innovative applications to capture the value hidden within data. For over 30 years, we have harnessed the power of Big Data for our clients. We gather data and utilize analytics to produce winning business insights. We enable our clients to drive revenue, increase profitability and gain greater competitive advantages. It might not be as glamorous as an F1 race in Monte Carlo, but at Experian, we share the same motivations as Williams Martini Race to use data correctly in order to deliver winning results. At the end of the day, F1 racing is about maximum performance. At the end of OUR day, Experian is about bringing value to consumers and maximum performance for businesses.
Debt is often thought of as a scary word and many spend their lives trying to avoid it at all costs. Understanding what credit is, why you need it and how to build it can help make it less frightening and can actually put you in control. Debt doesn't have to be a four-letter word. To wrap up Financial Literacy Month, Experian released a study this week that takes an in depth look at debt and credit scores in the 20 largest cities across the U.S. and compares the numbers to where these cities were four years ago. The findings show that Detroit residents have the least amount of debt, while the residents of Dallas have the most. From a national perspective, debt has increased by 5 percent and in 19 of the 20 cities studied, average debt has increased, which actually signals a positive trend. How is that possible, you ask? Well, the analysis showed that with the increases, these large cities are actually managing the debt they have quite well, and that credit lending is opening up. REMEMBER: Credit is a tool that if managed correctly can be a positive – the key is not to misuse the credit you have. Take a look at the map below to see how these large cities fared, and visit www.livecreditsmart.com to read more about the study and how you can make better financial decisions and be more aware of where you stand from a credit perspective. In today’s changing economy, it’s more important than ever to take control of your credit and live credit smart no matter where you live. See the map below and view the news release for more information on this study.
Did you know children are increasingly vulnerable to being a victim of identity theft? Their clean credit history is an easy target for perpetrators. Thieves often can profit for years before the crime is detected. In general, minors should not have credit activity or a credit report until they apply for loans or a credit card. That said, it is possible that they may have a credit history if you have added them as an authorized user to your credit accounts during their teen years. If you are concerned, checking your credit report is always a good first step in determining whether or not you are a fraud victim, and the same rule applies to children as well. Check out the infographic below for warning signs, steps you can take to see if your child has a credit report and tips to prevent your child from becoming a fraud victim. Here are the measures Experian uses to protect minors’ credit histories: Experian will not knowingly disclose a credit report that belongs to a minor except to a parent or legal guardian. At www.annualcreditreport.com if you enter a birth date that is associated as being under the age of 13, it will automatically reject the request to pull the credit report. Experian will not provide a credit report to a lender if our records indicate the report belongs to a minor. We will return a notice to the lender that states the report they requested is associated with a minor. The lender then can take appropriate action to protect the child from credit fraud. You cannot request your child’s credit report without providing appropriate documentation that proves you are the parent or legal guardian. For more information on minor’s credit visit the Ask Experian blog.
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.