Thirty-seven million consumers have no credit scores but would fall into the prime credit category if credit agencies assessed the individuals' loan risk, Mark Greene, CEO of Fair Isaac Corp., said last week at SourceMedia's third annual Underbanked Financial Services Forum in Miami.

 The company's research suggests 41 million subprime consumers live in the United States, as do 50 million underbanked consumers. But those groups overlap only to the extent that some 12 million consumers are subprime and underbanked, Greene said.

"I am concerned that many of your colleagues still believe the subprime and underbanked credit markets are the same," Greene told the audience, noting lenders lose a large business opportunity by failing to offer such consumers credit.

 Lenders that want to reach those consumers can find alternative ways to create credit scores, he said. Fair Isaac and other companies, such as Pay Rent Build Credit Inc., offer alternative credit scores based on payment histories for rent, utilities and other household bills, Greene said.

 Lenders also may want to create their own systems to produce alternative credit scores, he said.

Companies that want to lend to consumers with little or no credit history should start with small loans to minimize risk. They also should become the first in their area to offer loans to those consumers, if possible, and they should be prepared to make modifications based on what does and does not work, Greene said.       Some lenders may want to consider providing financing for nontraditional purchases such as for furniture and other consumer needs, he added.

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