Credit Risk

Alternative Data Sheds Light on Credit Invisibles

Alternative Data Sheds Light on Credit Invisibles

June 03, 2019 | Peter Oburu

Lenders have historically used credit data to score consumers. But the problem with this approach is that it prevents lenders from seeing “credit invisibles,” those consumers who work, pay utility bills or rely on specialty funding – but don’t use credit. The number of credit invisibles in the U.S. stands at a staggering 25 million people.

However, there is a way around this information imbalance that often exists between lenders and consumers. At the Equifax Spark conference in April, I explained how alternative data can reduce this information imbalance. Currently, the U.S. traditional credit database classifies:

  • 27% of consumers as thin file – or having a limited credit history
  • 71.3% of consumer as thick file – or having sufficient credit history
  • 1.7% of consumers as “unscoreable”

Infographic: Distribution of Total U.S. Population by Credit Worthiness


alternative data


By employing alternative data, lenders can move 11.4 million consumers from “unscoreable” and thin file segments to the thick file segment. This is due to the additional trade lines available from alternative data. Additionally, 50 million thin file consumers have supplementary trade lines even though they don’t move to thick file status. With all the options now available to lenders, they are now asking which alternative data is best for them.

spark zine


For more information on the topics discussed at the 2019 Spark conference, read our e-zine.    

Peter Oburu

Peter Oburu

Vice President, Data and Presales Analytics

Peter Oburu, VP of Data and Presales Analytics at Equifax, leads a data team that has stewardship in the maintenance and usage of the company’s U.S. data assets. These include the core consumer credit, telco and utilities as well as the third party data assets. Additionally, his team consults with various teams across [...]