Taking the time to understand each customer segment can reap benefits for companies wanting to earn or keep a foothold in the alternative financial services (AFS) industry. Gaining insights into underbanked consumers, in particular, helps financial providers and lenders gain a more complete, thorough perspective of loan applicants, who may otherwise go overlooked, and they can subsequently tailor their lending products toward this underserved segment—a potential $89 billion market. FactorTrust’s Demographic Edition of the Underbanked Index examines the living, earning and spending habits of installment and online consumers, providing insights from the FactorTrust national credit database. Also available is the Non-Prime Auto Edition, outlining consumers seeking subprime auto credit.
There are 113 million U.S. consumers with FICO credit scores under 700 today who should be recognized as Underbanked – consumers determined to improve credit scores in order to advance their situation and access more credit options.
This is a massively underserved population that, when taking alternative credit data into account, deserve credit options. We’ve seen people improve their credit scores – at every scoring level — by having alternative credit data factored in during the underwriting process. Using alternative credit data, lenders can grow their business by strategically evaluating and marketing to the Underbanked. More data is better for both the consumer and the lender.
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