Experian announced its Extended View score at the 7th Annual Underbanked Financial Services Forum this week in San Francisco. It is designed to assess the creditworthiness of consumers with little or no traditional credit history, often referred to as underbanked or underserved consumers.
Extended View is a proprietary credit score developed by the company that includes three unique data sources: Experian's credit data, rental information and public record data. It views a consumer's payment behavior and, according to Experian, streamlines the loan review process, helping lenders expand their underwriting population and offer underbanked consumers appropriate financial products to help them build a credit history.
Experian research shows 30% of the underbanked population display similar behaviors as low credit risk individuals, meaning that more than 20 million underbanked consumers may be eligible for financial products normally reserved for prime credit prospects.
These underserved consumers could include individuals who are new to credit, someone who is new to the United States, consumers who are leery of the lending market or even an individual who has satisfied previous credit obligations and lives on a cash basis.
"Experian is committed to helping consumers establish and build credit. Many of the estimated 64 million consumers with limited to no credit history that are unscoreable by traditional credit scores are creditworthy," said Steven Wagner, president, Experian Consumer Information Services. "Extended View can redefine how businesses evaluate this underserved population and empower more consumers with cost-effective credit and financial opportunities."
According to a survey by the Center for Financial Services Innovation, the majority of financial services providers expect the underbanked population to grow in the next two years. The survey also found that 93% of the financial services respondents said that reaching underbanked consumers is important or very important to the future of the industry.
Extended View score is Fair Credit Reporting Act-compliant, and offers a simple to implement score range of 401 to 990, closely aligned to VantageScore, which is the credit industry's first credit score developed jointly by Experian, Equifax and TransUnion.