All posts by Alex Lintner
We recognize that COVID-19 has challenged Americans across the country, and nearly a year later, people are still struggling to recover. Among the more pressing issues for people has been navigating the financial landscape and hardships brought on by illness and high unemployment rates. At Experian, we empathize with consumers and are committed to helping them manage their financial lives. As part of this commitment, Experian, along with the other U.S. credit reporting agencies, is continuing to offer free weekly credit reports to all Americans for an additional year via AnnualCreditReport.com. At Experian, we view ourselves as the consumers’ bureau, and aim to help people better position themselves as they recover from COVID-related hardships. We’re proud of our ongoing efforts to assist consumers, particularly during these difficult times. Financial and credit information is constantly updated, and we believe providing consumers with increased access to their credit reports will help them improve their financial health, monitor for lender updates and ensure there is no fraudulent or unfamiliar activity on their credit profiles. We are committed to helping facilitate access to fair and affordable access to credit for all consumers. Our goal is not only to help consumers build credit, but also to effectively manage it. Beyond our continued offering of free credit reports, consumers can access resources and educational materials to help learn about credit and other important personal finance topics. In fact, we recently launched our United for Financial Health project to empower vulnerable populations to improve their financial health through education and action. We’re continually exploring new ways to use our data and resources to empower consumers and to improve their financial health and recover from COVID-19; extending access to free weekly credit reports is just another step in that process.
While there is no question the pandemic continues to create a challenging financial situation for millions of consumers, this is not the case for everyone. Because Americans are finding themselves in unique financial situations, there is not a one size fits all solution for maintaining access to the credit economy. As 2020 comes to a close and U.S. consumers and businesses grapple with another surge in COVID-19 cases, it is critical for the credit services industry to continually recognize and assess the impact the pandemic is having on consumer’s financial health. At Experian, our role is to help lenders understand consumer’s unique circumstances, so they know who they are talking to and what risk an applicant represents at any given time. We use the power of data, including traditional credit data, alternative data and consumer permissioned data, to accomplish this objective. I was recently invited to speak with Cheddar’s Nora Ali to share my views on the Road to Recovery from the pandemic, how we can maintain access to the credit economy and ways consumers can protect their credit standing and financial health during this time. You can watch the full interview here. I believe data is key to maintaining access to the credit economy and protecting consumer financial health, especially in environments like the one we currently find ourselves in.
For the past several years, Experian has been on a journey to help drive financial inclusion for millions of people around the world. This has required significant focus on how we operate, who we partner with, and the products and solutions we offer. Four years ago, when we decided to partner with and invest in Finicity, a leading financial data aggregator based in Salt Lake City, we did so on our strong belief in consumer-permissioned data and our shared vision with their leadership team. At the time, we knew Finicity’s commitment to empower consumers and drive the digital revolution fit perfectly with our priorities. Over the years, this has proven to be true time and time again as we’ve leveraged Finicity’s technology capabilities to create enormous opportunity for our clients and improve financial access for consumers. One example is our partnership on Experian Boost. With the support of Finicity’s infrastructure, more than 4.9 million consumers have connected to Experian Boost to contribute their on-time payments for their telecommunications, utility, streaming service and cell phones directly to their Experian credit reports. Through Experian Boost, and access to real-time consumer-permissioned data, we are increasing financial inclusion by helping lenders identify more consumers who can pay responsibly. In an equally powerful testament to the power of consumer-permissioned data, our partnership with Finicity is helping streamline the homebuying experience for consumers and lenders. As a distribution partner of Finicity’s Verification Solutions, we are delivering Verification of Assets (VOA), Verification of Income (VOI) and Verification of Income and Employment (VOIE) to the mortgage market. This innovative digitization of data and analytics is streamlining experiences for borrowers and is a critically important step in modernizing the mortgage process. Additionally, we have clients successfully utilizing Finicity’s Verification Solutions in automotive underwriting, personal lending, tenant screening and other sectors. Earlier this week, Mastercard closed its acquisition of Finicity. This move, along with the overall trajectory of market demand, is testament to the fact that we clearly invested in the right capability, the right team and the right vision at the right time. But our journey together isn’t over, it has just been reinforced and will continue with Finicity even under new ownership. Our commitment to working with Finicity does not change with this news, it is only enhanced. Our drive to accelerate digital lending, empower consumers and drive more consumer-permissioned data solutions is higher than ever. We will continue to partner with Finicity, now part of the Mastercard family, as a central component of our strategy. We look forward to a continued strong relationship with this new, combined entity as we continue to bring innovative solutions for consumers and businesses to the table.
I was recently invited to a panel discussion as a part of Money 20/20 titled Do Credit Scores Still Matter? Closing the Chasm through Data and Innovation with Lauryn Nwankpa, Head of Social Impact at Dave and Jay Moon, General Manager of Credit at Credit Sesame. We discussed how important data and innovation are right now to ensure that consumers get access to credit that they need. As the largest credit bureau in the country, and in service of our mission to be the consumers’ bureau, we at Experian have a responsibility both to consumers seeking credit and to lenders who seek to assess the risk that a loan applicant represents. As part of this, we’ll continue to extract value from the data that lenders are used to getting from us and we innovate by providing new forms of data that can help the many Americans who either face barriers or sometimes pay more for credit because of a lack of credit history or having a credit file that’s too thin. I’m especially passionate about this as I myself was an immigrant and a thin-file customer at one point. When I came to this country, it was incredibly hard for me to develop a credit profile that I felt accurately reflected my financial situation and the (lack of) risk that I, as a borrower, would represent. But I was lucky as my first lender at the time was patient, just as I needed to be. They spent months seeking additional information about my situation, eventually enough to extend a firm offer of credit. It is not only immigrants who may face this or similar challenges. The impact of COVID-19 has created a difficult economic reality for many Americans. At Experian, we’re dedicated to having a culture of continuous innovation, from the way we work to the solutions we create to help consumers on the road to recovery. Especially during times of economic uncertainty, finding innovative means to effectively assess the creditworthiness of these consumers is critical. That’s exactly what we focus on at Experian in order to help consumers gain financial access and stability. Alternative data plays a critical role in achieving this. We’re finding new ways to use consumer-permissioned and alternative credit data in the credit scoring process, which can help lenders identify consumers who are excluded from the traditional credit ecosystem, but who can fulfill their financial obligations. I’ve seen firsthand how our data and technology can help transform the way businesses operate and have spoken to many consumers who leveraged our innovative services to help them thrive in society. Consumers want to be in the driver’s seat of their credit journey and we’re seeing a greater openness to providing data, which in turn enables lenders to make more informed decisions. This change is disrupting the status quo. Experian Boost is a great example of this. It’s a free and first-of-its-kind financial tool that empowers consumers to add positive telecom, utility and Netflix payment histories directly into their Experian credit file for an opportunity to instantly increase their FICO Score and access quality credit. More than 2.5 million have seen their scores improve with Experian Boost. So, do credit scores still matter? My answer is that credit reports are more relevant than ever. They matter more than the score alone as they detail a consumer’s financial track record and deliver a historical view of how a consumer is managing and repaying debt over time. This information helps lenders determine who can fulfill their financial obligations and ensures consumers continue to have access to credit so I don’t believe credit reports are going anywhere. As we navigate the road to recovery, it will be critical that all of us in the financial ecosystem work together to safeguard consumers and to maintain the integrity and openness of the credit market. The credit report, augmented by consumer-consented and alternative data, is a foundational pillar to achieve both of those objectives.
As the nation’s leading Credit Bureau, we have two primary goals. On one hand, we want to provide lenders the data necessary to assess the risk that a loan applicant represents. On the other hand, we want to help consumers build credit and improve access to credit. This bifurcated set of objectives is the inspiration behind our annual State of Credit report. Each year, this report provides a view into how consumers are managing credit, including their debt levels, on-time payments and utilizations rates. Now in its 11th year, our latest report shows promising signs in terms of how consumers are managing their debts against the backdrop of the COVID-19 pandemic. While there is no question the global pandemic has created many financial challenges for consumers, this report shows something I’ve always believed: many American consumers are resilient, they make smart decisions in light of a difficult environment and they adjust their financial habits. Specific evidence for that assertion can be found as we compare 2019, the year prior to the pandemic and 2020, the year marked by the impacts of the pandemic. Year-over-year, consumers lowered their credit card balances, decreased their utilization rates and reduced delinquency rates on the recurring monthly payments they need to make to service their debt. These factors attributed to an average credit score of 688 — a six-point increase from the same period in 2019. You can view additional findings from this year’s report here. The Value Credit Data in America When determining whether to extend an offer of credit to a consumer, lenders can gain excellent insight into a consumer’s risk profile from the information included in a consumer’s credit profile. It details a consumer’s financial track record and delivers a historical view of how a consumer is managing and repaying debt over time. This information helps lenders determine who can fulfill their financial obligations and ensures consumers continue to have access to credit. Recently, there are reports of using alternative means to assess consumer creditworthiness such as cash-flow data. While Experian is a recognized leader and advocate for the use of alternative data, the use of cash flow data alone can be risky. For example, consumer’s savings have also increased since the start of the pandemic. If a consumer is responsibly and regularly investing in some form of savings, this would narrow their cash flow, which may be misleading and constrain financial access. Looking at a consumer’s credit utilization rate, payment histories and credit balances through traditional credit data remains the primary means to effectively assess lending risk for most American consumers. When necessary, layering traditional credit data with alternative credit data can provide lenders with a more detailed view of a borrower’s stability, ability and willingness to repay. For example, innovations like Experian Boost empower consumers to contribute on time payment histories for additional monthly recurring financial obligations, such as their cable, utilities, mobile phone or Netflix service, directly to their Experian credit report. These payment histories can demonstrate to lenders how reliably consumers are servicing these payments. Incorporating this information has been proven to increase the predictiveness of a consumer’s credit reputation and can complement the data derived from their lending history. Of course, not every American consumer is in a position to adjust their financial habits and make the commensurate smart decisions. Some have had the rug pulled out from underneath them. The CARES Act stimulus was effective in increasing the number of consumers who could maintain their financial health, but still some need more help as we embark on the road to economic recovery from the COVID-19 pandemic. At Experian, we feel that educating consumers about the information included in their credit report and ways they can improve their credit histories will be another factor in getting the economy as a whole humming again and helping those most in need. We pride ourselves to be “The Consumers’ Bureau” and, as such, education will continue to be a primary focus for us. In an effort to encourage consumers to regularly monitor and understand the information in their credit reports, Experian joined forces with the other U.S. credit reporting agencies to offer free weekly credit reports to all Americans through April 2021 via www.annualcreditreport.com. Experian also offers consumers free access to their credit report and ongoing credit monitoring at Experian.com. For additional ways to maintain a healthy credit profile, I encourage you to: Join Experian’s #creditchat hosted by @Experian on Twitter with financial experts every Wednesday at 3 p.m. Eastern time. Visit the Ask Experian blog for answers to common questions, advice and education about credit. Add positive telecom and utility payments to your Experian credit report for an opportunity to improve your credit scores by visiting experian.com/boost[1] For additional resources, visit https://www.experian.com/consumereducation or experian.com/coronavirus. [1] Results may vary. See Experian.com for details
In a world that was already becoming increasingly digital, COVID-19 expedited timelines and turned forecasted projects into immediate needs nearly overnight. I’ve seen this play out in my role at Experian as well as across the financial services industry. Experian was recognized as an innovative company prior to the pandemic and the current environment has only accelerated our ability to innovate. As we surpassed the six month mark adjusting to our new normal, I was invited to join Bloomberg’s Future of Finance: Leveraging Digital Transformation for a Virtual World roundtable discussion with Senior Analyst of Bloomberg Intelligence Julia Chariell and leaders from IBM, Ally Financial, Deutsche Bank and others, to share how we are rising to meet the needs of consumers and lenders during the COVID-19 pandemic. You can find a recap of our conversation here and view the full video discussion here. We know each American is facing unique COVID-19-related circumstances, so there is not a one-size-fits-all solution. This notion has carried us as we are rising to meet the needs of our clients and consumers during the pandemic. We must allow individuals who can still meet their financial obligations to have access to credit and ensure lenders can identify them. Maintaining and improving financial access for these consumers will play an important role in our road to economic recovery. To continue to lend responsibly, the financial services industry must carefully examine all aspects of consumer financial capability in near real-time – consumer control and consumer-permissioned data play a key role in achieving this. By leveraging accurate data, I believe we have a chance to lessen the impact of the current U.S. economic crisis, extend credit responsibly, and support the hardest-hit consumers as we adjust to a new world post COVID-19.
With the impact of COVID-19, we’re certainly in uncharted territory. Many people are struggling with high unemployment, which is resulting in missed credit card, utility, and rent payments. In response, Experian is joining forces with the other U.S. credit reporting agencies, to offer free weekly credit reports to all Americans for the next year via AnnualCreditReport.com. A credit report allows people to monitor their finances and better understand their overall financial health. We’re proud our industry is uniting to make this possible for all U.S. consumers starting today. Credit reports are updated constantly, so the ability for an individual to look at their report weekly is helpful to monitor for lender updates and ensure there is no fraudulent or unfamiliar activity. During these difficult times, this is especially important. In addition to the free weekly credit report at AnnualCreditReport.com, Experian also offers consumers free access to their credit report, FICO score, and ongoing credit monitoring at Experian.com. This is a no-charge product. We want to give consumers multiple options to access and manage their credit report. At Experian, we’re committed to enabling fair and responsible lending through the power of our data. As the consumer’s bureau, our goal is to not only help consumers build credit but to get better access to credit. All of us are working diligently every day to keep our data as accurate, relevant, and secure as possible so that lenders can use the data to responsibly extend credit to people who need it most especially when the economy returns to strength. What You Can Do Now The most vital action someone can take if they are unable to pay a bill is to talk with their lender and inquire about assistance programs that may be available. If a consumer receives an accommodation it will have minimal impact on their credit score if their account is in good standing and if there hasn’t been previous delinquencies reported We remain committed to informing, guiding, and protecting people during these unprecedented times. Beyond our offer for free credit reports, we’ve created a dedicated website, with links to multiple resources and materials to help the community learn about credit and other important personal finance topics. We encourage everyone to visit the Experian COVID-19 Resources & Credit Education. Take care and stay healthy.
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.
Through Experian’s technology and cutting-edge innovations, we’re helping consumers build their credit histories and access affordable, mainstream financial products. We are truly improving consumer’s financial lives in a meaningful way. But, with all the exciting innovations in technology, sometimes, it’s easy to forget the impact we can create in our everyday interactions with people. Let me give you an example. I recently traveled to Nashville, TN for a conference. Since I didn’t know my way around the area, I hired a driver to pick me up and take me to my hotel. As I was heading to the airport exit, I saw a woman holding a sign that read “Experian.” I introduced myself and we both got into the car and headed for the hotel. As we were driving, she asked, “So, do you really work at Experian?” “Here we go…” I thought as I responded, “Yes, I do.” She went on to tell me she was a Desert Storm veteran who faced some real financial hardships that tanked her credit score when she returned home from war. She saw a commercial for Experian Boost, our new tool that allows people to get credit for paying their telecom and utility bills on time. After trying the free tool, her score went up 11 points. This boost got her thinking about other ways she could improve her credit score. I spent the rest of our drive sharing some credit education including the importance improving her debt to income ratio, lowering utilization rates and making on time payments. As we pulled up to my hotel and I got out of the car, she asked if she could give me a hug. “Of course,” I said. I was touched and slightly surprised, to see how much of an effect I had on her. Only, I didn’t realize then just how much of an impact our conversation would truly make on her life. I recently had a chance to reconnect with Renee Preston. She told me about the dramatic changes she’s made since we met that are creating a lasting impact on her financial health. At the time Renee picked me up, she was $56,000 in debt and her credit score was 605. Just a few months after meeting her, Renee put some of the credit education tips I shared with her into practice. Since then, she’s lowered her debt by $36,000 and her credit score has improved by more than 60 points. While Renee knows she still has work to do, she is inspired to continue to improve her financial wellbeing. “I’ve been driving for more than 26 years. I’ve met all kinds of celebrities like Pink and Justin Timberlake. The fact that Alex took the time to talk to a little person like me, it really meant a lot. Since we met, I’ve taken a lot of steps to improve my credit and finances including getting a job with a much higher salary. I truly feel I owe all of these changes to Alex.” Renee Preston, Nashville, TN As a company, we are committed to helping people improve their financial lives. When we talk about being the consumer’s bureau, this is exactly what we mean. I’m so thankful I had the opportunity to meet Renee. I’m inspired to continue to find new ways to improve people’s financial health, both personally and as a leading member of Experian’s team.