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At Experian we have an unwavering commitment to help consumers and clients manage through this unprecedented period. We are actively working with consumers, lenders, lawmakers, and regulators to help mitigate the potential impact on credit scores during times of financial hardship. In response to the urgent and rapid changes associated with COVID-19, we are accelerating and enhancing our financial education programming with the goal of helping consumers maintain good credit and gain access to the financial services they need. This is in addition to processes and tools the industry has in place to help lenders accommodate situations where consumers are affected by circumstances beyond their control. These processes will be extended to those experiencing financial hardship as a result of COVID-19. As the Consumer’s Credit Bureau, our commitment at Experian is to inform, guide and protect our consumers and customers during uncertain times. With expected delays in bill payments, unprecedented layoffs, hiring freezes and related hardships, we are here to help consumers in understanding how the credit reporting system and personal finance overall will move forward in this landscape. One way we’re doing this is inviting everyone to join our special eight-week series of #CreditChat conversations surrounding COVID-19 on Wednesdays at 3 p.m. ET on Twitter. Our weekly #CreditChat program started in 2012 to help the community learn about credit and important personal finance topics (e.g. saving money, paying down debt, improving credit scores). The next several #CreditChat events will be dedicated to discussing ways to manage finances and credit during the pandemic. Topics of these #CreditChats will include methods and strategies for bill repayment, paying down debt, emergency financial assistance and preparing for retirement during COVID-19. “As the consumer’s credit bureau, we are committed to working with consumers, lenders and the financial community during and following the impacts of COVID-19,” says Craig Boundy, former Chief Executive Officer of Experian North America. “As part of our nation’s new reality, we are planning for options to help mitigate the potential impact on credit scores due to financial hardships seen nationwide. Our #CreditChat series and supporting resources serve as one of several informational touchpoints with consumers moving forward.” Being fully committed to helping consumers and lenders during this unprecedented period, we’ve created a dedicated blog page, “COVID-19 and Your Credit Report,” with ongoing and updated information pertaining to how COVID-19 may impact consumers’ creditworthiness and – ultimately – what people should do to preserve it. The blog will be updated with relevant news as we announce new solutions and tactics. Additionally, our “Ask Experian” blog invites consumers to explore immediate and evolving resources on our COVID-19 Updates page. In addition to this guidance, and with consumer confidence in the economy expected to decline, we will be listening closely to the expert voices in our Consumer Council, a group of leaders from organizations committed to helping consumers on their financial journey. We established a Consumer Council in 2009 to strengthen our relationships and to initiate a dialogue among Experian and consumer advocacy groups, industry experts, academics and other key stakeholders. This is in addition to ongoing collaboration with our regulators. Additionally, our Experian Education Ambassador program enables hundreds of employee volunteers to serve as ambassadors sharing helpful information with consumers, community groups and others. The goal is to help the communities we serve across North America, providing the knowledge consumers need to better manage their credit, protect themselves from fraud and identity theft and lead more successful, financially healthy lives. COVID-19 has impacted all industries and individuals from all walks of life. We want our community to know we are right there with you. Learn more about our weekly #CreditChat and upcoming schedule here.
Whether due to job loss, shortened working hours, or the need to take off time from work to care for ill family members, the current COVID-19 outbreak will undoubtedly cause financial hardship for millions of Americans. Understandably, the current situation is causing some consumers to fear losing something they’ve worked incredibly hard for – their home. For many, a home is the largest purchase they’ll ever make. We spend many years of our lives working to purchase a home and then many years after working to fill it with memories. We understand how important it is for you to protect your home. Thankfully, we’re seeing mortgage lenders, federal associations and the financial industry working together in truly unprecedented ways to help consumers cope with new financial challenges brought on by COVID-19. Last week, the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — two of the largest mortgage services in the county — announced they are suspending foreclosures and evictions for at least 60 days. You can read more about this announcement here. This was followed by New York, an area hit particularly hard by COVID-19, urging mortgage servicers to refrain from reporting late payments for 90 days. The order outlines ways lenders can provide support to consumers who are unable to make timely mortgage payments, including forbearing mortgage payments for 90 days from their due dates. As part of this, late payments would not be reported to credit reporting agencies like Experian for 90 days and consumers would not have to pay late or online payment fees. The order also postpones foreclosures and evictions for 90 days and requires lenders to proactively outreach to consumers, through text, email or other means to ensure they’re aware of the assistance that’s being offered. Los Angeles, Miami and other cities across the U.S. are now also halting evictions. This news was shared in conjunction with Bank of America announcing additional support to borrowers, including the option to defer, or essentially pause, mortgage payments during the current outbreak. Many of the largest mortgage lenders in the country are offering the same support to consumers. Please note, the Department of Housing and Urban Development, Fannie Mae and Freddie Mac acted fast, and these are the guidelines as of the time when this article was written. As things are still early, our Experian mortgage team will stay abreast with potential new developments and update this information if or as things will change. These are unprecedented times and we are starting to see lenders and consumers engage in equally unprecedented ways as we work to overcome the new reality we’re all facing. At the same time, we are seeing interesting trends unfold in terms of mortgage lending activity. According to the Mortgage Bankers Association, as of March 25, 2020, these include: Refinancing existing mortgages, which has been booming with interest rates at historically low levels, declined almost 35% compared to the previous week, but is still twice as high as it was the previous year. Not surprisingly, the states with the biggest declines are the states hardest hit by the COVID-19 outbreak (i.e. New York, Washington, and California) In addition, with the economy under pressure, there was a nearly 30% decline in weekly new mortgage applications. If you or someone you know is a homeowner, I hope you found this information useful. Remember, if you are concerned you may miss a mortgage payment, the first and best move you can make, to protect your home and your financial health, is to contact your mortgage lender as soon as possible. Lenders do not want you to miss a payment any more than you do. They can discuss options for navigating these unusual circumstances. Keep in mind, these programs are available to you if you are facing financial hardship due to the COVID-19 crisis, for example, if you lost your job or had to be hospitalized. Of course, we’re all hoping not to be in either of these categories. If you haven’t been financially impacted by the current COVID-19 crisis, you are expected to continue to make your mortgage payments (and meet all your other financial obligations). You should feel good about being able to do that as it will make you part of the important group of individuals who can keep contributing to sustaining the American economy.
Last year we revealed that there were around 5.8 million people in the UK who were virtually invisible to the financial system. These ‘credit invisibles’ might have limited financial data because they just turned 18 and are new to credit, or they may have recently moved to the UK. Alternatively, perhaps they conduct most of their transactions in cash or simply haven’t used credit for a long time. Either way, we wanted to spotlight the issue, to explain how we can help people regain control of their financial footprints and ensure more people get access to affordable financial products and services. So, as our support for Credit Awareness Week moves into its fourth year, we decided to check in on our progress. The positive news is that we have managed to reduce this financially excluded population by nearly half a million in the last 12 months, to just over 5.3 million – as the map below shows. Credit Awareness Week 2020 offers us all the chance to reflect on all the hard work that so many of us have put into tackling financial exclusion. As a result of this work, more people can access the mainstream services they need, and many are paying less than they otherwise would have. Yet there is much more which needs to be done. We need to continue to innovate and find new solutions to help widen affordable financial access for all. Promoting a better understanding of the things that people can do to help improve their financial track record. Together we can continue our mission to bring more people into the mainstream financial system and deliver better, more affordable products and services for everyone.
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.