Equifax Alternative Data Helps Expand Community Banks’ Credit Card Customer Base
AS COMPETITION WITHIN THE CREDIT CARD LANDSCAPE INTENSIFIES, community bankers are turning to The Work NumberⓇ database from Equifax to make faster and smarter decisions that expand the potential borrower pool. With approximately 600 million credit card accounts in the U.S., consumers typically use just two consistently. Community banks face a challenge in making one of their cards a “top-of-wallet” choice.
Consumers often choose which card to use based on factors like rewards, points programs, cashback and travel incentives. Smaller financial institutions can struggle to match the perks offered by much-larger banks but the use of alternative data—including income and employment verification through The Work Number—can help them to identify and serve responsible consumers who may have been overlooked through the traditional credit score process.
“Incorporating traditional credit reports, alternative data and verified income data from The Work Number allows lenders to better evaluate a potential borrower’s financial position,” said Jeff Smith, a Sales Director at Equifax. “In an increasingly competitive race to capture top-of-wallet status, financial institutions that leverage the latest tools and resources are the ones best positioned to succeed without increasing their exposure to risk.”
Alternative data includes things like utility bills, phone payments, and other non-traditional financial information. When combined with verified income and employment data available through The Work Number—which draws from more than 4.4 million contributing employers—it gives lenders a clearer picture of someone's financial life beyond the standard credit report.
By layering alternative data with traditional credit data, bankers are better positioned to make faster, more informed decisions from the point of application throughout the entire credit card lending lifecycle. Right now, nearly 76 million Americans don’t have enough credit history to get a score. That includes 61 million with very limited credit and 16 million with no credit record at all. The Work Number helps bridge this gap by providing reliable, instant verification of income and employment status, enabling lenders to safely expand the borrower pool to include creditworthy young adults, gig workers, and other consumers who may lack traditional credit histories into the market.