The Consumer Financial Protection Bureau is seeking feedback on the benefits and risks of using alternative data sources — such as mobile phone bills and rent payments — to help consumers establish a credit history. Using this information could help expand access to affordable credit to consumers who lack a traditional credit history built from mortgages, credit cards and other loans, the CFPB said. The bureau estimates that as many as 45 million Americans have either insufficient or nonexistent credit histories.
In its investigation, the bureau will consider how using alternative data sources could improve creditors’ ability to assess creditworthiness, and whether it would add additional cost or complexity to the credit application and approval process. The CFPB will also examine the privacy and data security implications of using alternative data sources, and how certain demographic groups might be affected if alternative data were factored into credit scoring models.Email This Post