Auto Lenders, Are You Missing Growth in Your Blind Spot?
Highlights:
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Using traditional credit data alone may cause auto lenders to overlook potential borrowers with "thin files" or those who are "credit invisible."
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Alternative data, such as income from payroll, rent, utility, and mobile phone payment history, can provide a more complete financial picture, enabling lenders to approve more responsible borrowers and grow their portfolios.
Auto loan delinquencies are climbing. More drivers are falling behind on their payments, and that’s making things harder for auto lenders. You need to protect your business, while also bringing in new customers. It’s a tricky balancing act — and the pressure is growing.
But what if you’re missing out on some great borrowers due to inaccurate and inefficient processes?
With traditional credit data alone, you might not see them. That’s where alternative data can help.
Traditional Credit Data Tells Only Part of the Story
Most auto loan decisions are based on information in a borrower’s traditional credit report. That credit report, which is used to calculate credit scores, includes things like:
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Credit cards
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Mortgages or student loans
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Loan repayment history
But what happens if someone has never had a traditional loan or credit card? They might not have much — if anything — on their credit report. These are called “thin file” or “credit invisible” customers. And there are a lot of them out there.
Many people pay their bills on time every month but don’t use traditional credit. Others are just starting out, like young adults or recent graduates. Some choose to live debt-free and prefer using debit or cash. Others may be new to the United States, so while they may have credit in another country, they haven’t had the opportunity to build credit here yet.
When you rely only on traditional credit data, these kinds of customers often get overlooked. Or worse — they get denied because they aren’t fully seen.
Alternative Data Fills in the Gaps
Alternative data helps you see the full financial picture of a borrower. It includes things that don’t usually show up in a traditional credit report, like:
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Income from payroll data
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Rent and utility payment history
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Mobile phone and pay TV payments
This kind of information can tell you a lot about a consumer’s ability to manage money, even if they don’t have a credit score. For example, an individual who earns a steady income and always pays rent and utilities on time may be a strong borrower.
The traditional credit file shows only a portion of a person’s financial story. Alternative data — like utility and telecom payment history, along with employment records — can reveal deeper insights into financial access and behavior and help more potential customers access better auto financing options.
See What’s in Your Blind Spot
Think of traditional credit data like your rearview mirror. It shows you part of what’s behind you. But alternative data is like your blind spot mirror or backup camera. It helps you see what you didn’t notice before.
And right now, what you’re not seeing could be costing you, especially in such a highly competitive market.
By using alternative data, you could:
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Say yes to more responsible borrowers
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Grow your portfolio with lower-risk customers
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Reach younger generations who aren’t using credit the same way
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Expand access to auto loans without increasing risk
It’s a smart way to uncover new opportunities — especially when you’re feeling the squeeze from rising delinquencies.
Enter Insight Score® for Auto. This score blends exclusive Equifax credit data with unique telecom and utility information not found with other third-party providers. Powered by NeuroDecision® Technology, it leverages industry-specific models to help predict the likelihood that a consumer will become 90 days or more past due within 24 months of opening an auto loan.
Drive Growth Without Losing Control
Auto lending is changing. Your customers are changing. The tools you use to assess them should change too.
Alternative data won’t replace traditional credit files, but it can enhance them. It gives you deeper insight, better confidence, and more chances to approve the right borrowers. So ask yourself: What might you be missing in your blind spot? With alternative data, you can find new ways forward — and drive growth, even in uncertain times.
Evaluate new auto loan applicants with greater confidence, uncover new prospects, and adjust credit levels among current customers based on a more complete view of their payment histories and behavior with Insight Score® for Auto.
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