30 Mar Social Networks Are Making the Invisible Visible
1 in 5 adults in the United States cannot obtain credit due to the fact that they are unscorable or invisible in the eyes of the credit bureaus. The terms “thin” or “no file”, “credit invisible”, and “credit unscorable” have been used for years when discussing consumers who simply do not have enough credit history, but really, how big is the problem? According to a study conducted by the Consumer Financial Protection Bureau (CFPB) in 2015, 1 in 10 adults in the United States, ~26 million people, are considered credit invisible.
Credit invisible and credit unscorable are sometimes used interchangeably, yet are actually quite different. A consumer is considered credit invisible when they have absolutely zero credit history with any of the credit bureaus (TransUnion, Equifax, and Experian). Whereas a consumer is considered unscorable, when there is either not enough or insufficient credit history, or the credit history is severely outdated. In the United States, 19 million adults are considered to be unscorable, which combined with consumers who are invisible, makes up 20% of the adult population. Reasons as to why consumers are invisible or unscorable to traditional bureaus include, but are not limited to, age (millennials), recent immigration, or simply being unbanked.
Contrary to popular belief, no consumer is actually invisible. By utilizing alternative data, such as Merchant Boost’s Social Network Boost, companies are able to have insight into the identity of consumers who are traditionally considered invisible or unscorable. With just the click of a button, Social Network Boost provides insight into the consumer with many pieces of useful data. An example of the data provided includes: full name, email, reported location, date of birth, age of account, connection counts, reported employment history, reported education history, and much more including easy to interpret scores.