Data Innovation Could Unlock Car Ownership for Millions More U.S. Adults

Purchasing a vehicle can have a significant impact on a person’s life. It unlocks greater mobility - allowing the owner to get to/from their job and transport children to school or daycare - and ultimately helps fuel economic development within communities. However, for the 92 million U.S. adults with little-to-no credit history*; and 67 million with “thin” credit files (4 or less credit accounts)*, the purchase of that vehicle can come with potential hurdles.

While credit reports remain a strong indicator of credit history and past financial reliability, current Fair Credit Reporting Act (FCRA) compliant information that is not included in traditional credit report data has the potential to help responsibly expand consumer access to credit opportunity and support a more inclusive economy. By also looking at data related to a person’s current employment and income, auto lenders are able to see a more complete view of the applicant and more confidently open up credit access - and vehicle ownership - to a much wider range of people.

In a research partnership with Washington University’s Olin Business School and the University of Pennsylvania’s Wharton Business School, it was found that leveraging verified employment and income data from Equifax significantly expands credit access for auto loans.

In the study, we analyzed auto loan originations. By incorporating employment and income data from The Work Number®, loan originations increased by 35.5% on average with a much greater increase for consumers in the subprime and deep subprime categories. And, interest rates on these loans were only 2-4% higher.

Leveraging expanded, alternative data insights is a win-win for consumers and lenders. More consumers are empowered to purchase a car - leading to improved mobility and in turn access to a wider array of job opportunities. Lenders also benefit because they are able to responsibly offer more loans.

Helping more people gain access to the mainstream financial services they need is core to our business. We believe that positive economic change starts with a single financial opportunity. It’s why we’re constantly innovating every day – to deliver better outcomes for consumers at scale.

Learn more about employment and income verification services from The Work Number. The full research paper and findings can be found here.