Margin test

In a recent report, the Consumer Financial Protection Bureau (CFPB) estimated that there are more than 45 million American consumers that are “credit invisible,” meaning that they either have no credit history or a credit file too thin to receive access to mainstream credit products. This limits their ability to get an affordable loan for a car, realize the dream of homeownership or even restricts access to capital to start a small business.  More frequently, a lack of credit history forces consumers to turn to more expensive, short term lending options. While credit invisibles may not have a traditional credit history, many make their cable, utility and mobile phone payments on time. However, this on-time payment data is not being included in their credit file. Historically, telecom and utility companies have only reported instances when a consumer is behind on payments or an account has been turned over to collections. This means that credit invisibles may have negative data from telecom and utility companies in their file, but are unable to build their credit file with positive data even if they make on-time payments each month. The good news is that Congressional leaders have recognized the need for action. On December 3 the Credit Access and Inclusion Act (H.R. 4172 and S.2355) was reintroduced in Congress, with Representatives Mike Fitzpatrick (R-Penn.) and Keith Ellison (D-MN) taking the lead in the House and Senators Mark Kirk (R-Ill.) and Joe Manchin (D-WVA) taking up the effort in the Senate. The bipartisan bill would amend the Fair Credit Reporting Act to make clear that utilities, telecommunication and rental companies can report on-time payment histories and positive data to the nation’s credit reporting bureaus, rather than just late payments or collection actions that they are currently furnishing. It would in no way require these companies to do so, but would help reassure these entities that there are no regulatory barriers to reporting on-time payment information. There is a detailed track record of research showing how the inclusion of alternative data will enable millions of credit invisible American consumers who have a proven track record of meeting financial obligations to access mainstream credit. A recent study by PERC and the Brookings Institution found that when energy utility and telephone firms report timely and late payment data alike, those who are deemed credit invisible shrunk to around 5 million. A separate study has also shown that the inclusion of this credit data would be a net positive for traditionally underserved populations, including minorities, young adults and the elderly. Moreover, a 2014 Experian study found that by including on-time utility payments in credit reports, there was nearly a 50 percent drop in subprime consumers with credit scores* between 300 and 600; a 54 percent increase in consumers considered nonprime with credit scores between 601 and 660; and a 15 percent increase in those with credit scores over 661, generally considered prime. I encourage lawmakers to take up this legislation and move it forward to ensure that consumers receive credit for meeting their financial obligations.

The Orange County Register recently recognized Experian as one of the Top Workplaces among hundreds of leading companies in Orange County for the third year in a row. In addition, we were recognized for our efforts to make our communities better, earning a separate award as the top large business for Social Responsibility. This was based on Experian contributing more than 4,000 hours in volunteer time to various charities, including our work with Big Brothers Big Sisters of Orange County, volunteering time at 25 high schools and providing counseling and help at the OC Rescue Mission. The selection process is based solely on employee feedback gathered from a survey. This methodology is important because it reflects what our employees think of Experian. It shows that we’re more than just a place where people work, rather we’re a community where our team members take pride in contributing. “Every day, our team members go to work with the aim of helping more people achieve their financial goals like buying a home, or helping businesses make better informed decisions through smart analytics,” said former Experian North America CEO Craig Boundy. “Every day, we’re driven to find new ways to use data for good, because corporate social responsibility lies at the heart of Experian.” We promote a culture of community volunteerism.  Last year, Experian employees contributed thousands of hours in volunteer time for our North American philanthropy partners, while raising and donating nearly a million dollars. For example, we provide credit education to people struggling to overcome a legacy of homelessness as part of our data for good mission.  We do this by working with the Orange County Rescue Mission, an organization that provides a host of potentially life-changing services: on-campus housing, drug rehab, counseling, parenting and life skills classes, and job search training. We also partner with the nonprofit American Student Assistance to provide support to recent graduates and students managing their student loan debt. We do this by offering our Credit Educator product at no charge to students, graduates and their parents who have been in touch with ASA and who need information about their credit and how their student funding decisions can affect their future creditworthiness. Social responsibility is at the very heart of Experian – and something that we encourage. “This third consecutive award recognizing us as a Top Workplace in Orange County reflects that our focus on professional development, a positive environment, and opportunities to contribute to our communities is well-received by our team members,” said Boundy. Experian employees continue to make a difference in the Orange County community, which we have called home for more than 40 years. We’re proud that the Orange County Register continues to view Experian as a Top Workplace.

There are many things that can cause angst for consumers during the holiday season including travel delays, overeating, and picking a New Year’s resolution. One of the biggest stressors is often the financial impact of holiday shopping. In fact, according to a national survey by Experian, many respondents are concerned about the financial stress of gift buying and adding debt, as well as becoming an identity theft victim. While some survey respondents feel cheerful (39 percent) and excited (38 percent) about the holidays, many believe holiday shopping is a strain (60 percent), and almost half feel obligated to spend more than they can afford (41 percent). How will they pay for holiday gifts? They will be using credit as almost half of those surveyed plan to use credit for about 25 percent of their expenditures. Unfortunately, missing payments or opening new cards can damage a consumer’s credit profile – ten percent of respondents say holiday shopping has negatively affected their credit scores. Another concern for consumers is the risk of identity theft (50 percent). Survey respondents feel the risk is both present while shopping at “brick and mortar” retail locations or online with 55 percent choosing both as equally vulnerable. While 30 percent of respondents cite online shopping as riskier, almost half still plan to shop online. View the full report in the SlideShare deck below: Experian Consumer Holiday Shopping Survey from Experian_US

On Nov. 8, 2016, citizens across the country will flock to polling stations to cast their votes for the 45th President of the United States. Until then, however, you can expect to hear a number of candidates offer their views on a plethora of political issues over the next year, including small business. As a battleground for political debate and its importance to economic success, small businesses can have a tremendous impact on the upcoming election, and those to follow. Gaining insight into the small business community is more important than ever and critical to understanding their needs and helping them grow. As part of its latest analysis on small businesses, Experian examined the financial and demographic characteristics of small-business owners by political affiliation. The research found that Republicans made up the largest percentage of the small business owner population at approximately 35 percent. They were followed by Democrats at 29.4 percent and Independents at 15.8 percent. Findings from the study also showed that small-business owners who identify as Independent may have the most education experience. More than 73 percent of Independents have some college experience, and 45 percent have earned a bachelor’s degree. Comparatively, 72.3 percent of small-business owners who identify as Republican have some college experience and 44.1 percent have earned a bachelor’s degree, while Democrats account for 66 percent and 39.3 percent, respectively. When it comes to the credit and payment behavior of these small-business owners, the research found that Republicans have the highest average business loan balances and the second-highest consumer loan balances at $9,823 and $193,483, respectively. Democrats fell on the other end of the spectrum with the lowest average business ($7,540) and consumer ($172,653) loan balances. Furthermore, Republican small-business owners demonstrated good payment behavior, with the lowest delinquency rates (91-plus days) for commercial and consumer credit cards at 0.98 percent and 5.8 percent, respectively. For a more in-depth look into the characteristics of small-business owners by political affiliation, register for our Webinar that will take place on Jan. 20, 2016 at 1 p.m. Eastern time. Painting a clearer picture of the small business community, enables government officials, lenders and business professionals to better understand the ins and outs of small-business owners, and gain insight into what matters most to them. Small businesses are the backbone of our economy and fixtures in the local community. By addressing the needs of small businesses, and setting them up for success, our economy and society can continue to prosper.

Small Business Saturday is just around the corner, and as it approaches there are a growing number of advertising campaigns encouraging consumers to forego the big box retailers in favor of shopping local. As a supporter of my own neighborhood small businesses, I can appreciate the effort. After all, the success of small businesses is what really drives our economy forward. Not only do they provide employment opportunities for those in the community, but small businesses often bring a level of innovation and can stimulate growth. However, in the midst of the day-to-day activities, especially during the holiday season, small business owners often overlook a crucial component of their businesses – their business credit. While some small business owners may not realize it, a business’s credit profile can be as critical to its success as heavy foot traffic. At Experian, we’re committed to educating small business owners on the importance of business credit, as well as how they can make their business credit work for them. The actionable insights available through a small business’s credit profile can help position it for new growth opportunities. To help keep small business owners on track this holiday season, below are seven tips to help prevent these often overlooked aspects of business credit. Get your business credit profile into the best shape ever. A positive business credit profile can help your business grow. Lenders and suppliers often make lending decisions and determine interest rates based on the information within your business credit report. Access to financial capital at affordable rates enables small businesses to order inventory, pay employees or expand into new areas. Separate your business credit profile from your consumer credit profile. Building a separation between the two can help your business develop credibility that matters to banks, suppliers and other lenders, as well as protects your consumer credit should your business run into hard times or vice versa. Encourage your creditors and suppliers to report your payment history to commercial credit bureaus. Just because you have a business, do not assume you have a business credit report. Unless your creditors are reporting timely payments to commercial credit bureaus, a good track record will not impact your business credit profile. Pay bills on time! Sound payment practices are key to a solid business credit profile. Timely payments can demonstrate your ability to adhere to agreed-upon credit terms and show that your business is a low credit risk. Be consistent. Making timely payments for an extended period of time is healthy. Just as anything else, a longer track record indicates consistent behavior. The longer a positive commercial account is open, the more confidence a lender can when extending loan terms. Continually monitor your business credit report for accuracy. As small businesses grow and change over time, basic facts about the business can frequently change. It’s important to keep updated information and avoid unpleasant surprises, especially when applying for a loan. Consistent monitoring will also enable owners detect potential business fraud. Check the commercial credit reports of current and potential suppliers. Understanding a potential supplier’s credit history can help identify which businesses you want to do business with. For instance, you may gain insight whether or not a supplier can deliver materials to your business in a timely manner. Small business owners can also learn about the fundamentals of business credit and its impact on a business’s growth during an Experian hosted tweet chat on Thursday, Nov. 12 at 1:00pm Pacific time. You can follow the conversation using #BizSmallTalk. As the saying goes, “knowledge is power.” By gaining a deeper understanding of the ins and outs of business credit, and leveraging the insights from their business’s credit profile, small business owners will be able to open new doors and take their companies to new heights.