How do consumers feel about alternative credit data?
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Consumers rely on credit for purchases big and small. While some have robust credit files, others are still invisible and seeking ways to grow their credit presence so they can have access to loans, credit cards and beyond. What types of information and data will they share to grow their credit files? In an exclusive Experian survey, we asked consumers how they perceive alternative credit data sources. Here are the findings.
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How do consumers feel about alternative credit data?
- 1. ©Experian1 Alternative Data Consumer Study 2018 ©2018 Experian Information Solutions, Inc. All rights reserved. Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
- 2. ©Experian2 Headlines 1. Most consumers are willing to share additional financial information if it means they would increase their chances for loan approval or improved interest rates. 2. Half of consumers want utility payment history evaluated as part of their credit history. 3. Over half of consumers believe adding this data would have a positive impact on their credit standing. 4. Almost half of consumers believe they are a better borrower than their credit score represents. 5. 71% of consumers checked their credit score within the past 12 months 6. 75% of consumers strongly agree/agree know the steps required to improve their credit score.
- 3. ©Experian3 Attitudes toward credit & sharing financial data 55% of consumers believe allowing digital access is more convenient than hard copy 60% 47% 29% 55% I think my credit score accurately represents my creditworthiness. I believe I am a better borrower than my credit score represents. Allowing lenders to digitally access my financial data (e.g. bank statements, paystubs) is more secure than providing hard copy documents to my lender. Allowing lenders to digitally access my financial data (e.g. bank statements, paystubs) is more convenient than to collecting hard copy documents and providing them to my lender. Allowing lenders to digitally access my financial data (e.g. bank statements, paystubs) is more convenient than collecting hard copy documents and providing them to my lender. Allowing lenders to digitally access my financial data (e.g. bank statements, paystubs) is more secure than providing hard copy documents to my lender. I believe I am a better borrower than my credit score represents. I think my credit score accurately represents my creditworthiness. Q14 Now, we would like to better understand your attitudes toward credit and sharing financial data. For each of the statements below, please rate your level of agreement. Results based on general population survey. N=540
- 4. ©Experian4 Q14 Now, we would like to better understand your attitudes toward credit and sharing financial data. For each of the statements below, please rate your level of agreement. Results based on general population survey, plus oversample. N=646 Attitudes Toward Credit & Sharing Financial Data %Strongly Agree/Agree Age Group Gen Z (18-21) n=100 Gen Y (Young) (22-28) n=46 Gen Y (Older) (29-35) n=90 Gen X (36-50) n=135 Boomer (51-70) n=175 Silent (71+) n=100 I think my credit score accurately represents my creditworthiness. 44% 54% 50% 54% 67% 81% I believe I am a better borrower than my credit score represents. 46% 63% 44% 51% 47% 35% Allowing lenders to digitally access my financial data (e.g. banks statements, paystubs) is more secure than providing hard copy documents to my lender. 38% 37% 32% 33% 23% 16% Allowing lenders to digitally access my financial data (e.g. banks statements, paystubs) is more convenient than to collect hard copy documents and providing them to my lender. 57% 61% 57% 58% 50% 54% Attitudes toward credit & sharing financial data by generation
- 5. ©Experian5 Types of alternative data consumers are willing to share Among renters two-thirds would be willing to share rental payment history 13% 13% 15% 30% 38% 41% 44% 50% 51% 54% 55% Money Transfer History None Payday loan/Cash Advance Retirement Accounts Rental Payment History Cell/Mobile Phone History Insurance Information Checking/Savings Acct Tax Returns Utility Bill Payment History Paycheck StubsPaycheck Stubs Utility Bill Payment Tax Returns Checking/Savings Accounts Insurance Information Cell/Mobile Phone Payment Rental Payment History Retirement Accounts Payday loan/Cash Advance None Money Transfer History Paycheck Stubs Utility Bill Payment Tax Returns Checking/Savings Accounts Insurance Information Cell/Mobile Phone Payment Rental Payment History Retirement Accounts Payday loan/Cash Advance None Money Transfer History Q14 If you were making a purchase such as a home or car, what information would you be willing to share if it meant that you may improve your chances for approval or qualify for a lower interest rate? N=540. Renters = 181
- 6. ©Experian6 Likelihood to share 71% of consumers are likely to share more financial information if it increased chances for credit approval Likelihood to share more financial information if it increased chances for credit approval 4% 5% 21% 41% 30% Extremely Unlikely Somewhat Unlikely Neither Likely nor Unlikely Somewhat Likely Extremely Likely Type of financial information would share 13% 13% 15% 30% 38% 41% 44% 50% 51% 54% 55% None Money Transfer History Payday loan/Cash Advance Retirement Accounts Rental Payment History Cell/Mobile phone history Insurance Information Checking/Savings Acct Tax Returns Utility Bill Payment History Paycheck Stubs Extremely Likely Somewhat Likely Q16 If you were making a purchase such as a home or car, what information would you be willing to share if it meant that you may improve your chances for approval or qualify for a lower interest rate? N=540 Q20.If sharing additional financial information (e.g. bank account, utility payment history) with a lender increased your chances for approval or improved your interest rate for a mortgage or car loan, how likely would you be to share the additional financial information? N=540 Paycheck Stubs Utility Bill Payment Tax Returns Checking/Savings Accounts Insurance Information Cell/Mobile Phone Payment History Rental Payment History Retirement Accounts Payday Loan/Cash Advance Money Transfer History None Neither Likely nor Unlikely Somewhat Unlikely Extremely Unlikely
- 7. ©Experian7 Information evaluated in credit history Half of consumers indicated they would want their utility bill payment history evaluated in their credit history 12% 12% 22% 24% 30% 35% 37% 38% 38% 39% 50% Money Transfer History Payday Loan/Cash Advance Retirement Accounts None Insurance Information Rental Payment History Tax Returns Cell/Mobile Phone Payment… Paycheck Stubs Checking/Savings Acct Utility Bill Payment History Q17. Below is a list of financial information that may or may not be listed on your credit report. Please indicate what information you would want evaluated in your credit history? N=540 Utility Bill Payment History Checking/Savings Accounts Paycheck Stubs Cell/Mobile Phone Payment Tax Returns Rental Payment History Insurance Information None Retirement Accounts Payday Loan/Cash Advance Money Transfer History
- 8. ©Experian8 Impact of additional reporting on credit report 62% of consumers believe reporting additional financial information would have a positive impact on their credit report 62% 32% 6% Positive Neutral Negative Impact consumers believe this would have on their credit standing Q18. If this data was reported, what impact do you believe this would have on your credit standing? Rebased. N=551
- 9. ©Experian9 Credit score assessment 75% of consumers strongly agree/agree know the steps required to improve their credit score. Q19. Please rate your level of agreement. I understand the steps I need to take to improve my credit score. Q24. When was the last time you checked your credit score? N=540 2% 3% 20% 32% 43% Strongly Disagree Disagree Neither Agree nor Disagree Strongly Agree Agree 71% of consumers checked their credit score within the past 12 months Agree Strongly Agree Neither Agree nor Disagree Disagree Strongly Disagree
- 10. ©Experian10 Methodology • Online quantitative survey on nationwide general population sample of U.S. consumers balanced by census regarding awareness, usage and attitudes regarding alternative data. • Survey fielded between March 13 – March 19, 2018 • 646 qualified and completed entire survey. • General population sample. N=540 METHODOLOGY
- 11. ©Experian11 Demographics 22% 29% 18% 12% 13% 2%4% Household Income Under $25K $25K - $49.9K $50K - $74.9K $75K - $99K $100K - $200K Above $200K 5% 9% 17% 25% 32% 12% Age GenZ (18-21) GenY (Young, 22-28) GenY (Old, 29-35) GenX (36-50) Boomer (51-70) Silent (71+)
- 12. ©Experian12 To learn more, visit: www.experian.com/alternativedata.com