How an Alternative Credit Data API Can Expand Lending Opportunities

Alternative data sources are a key ingredient in the financial services industry. Using alternative data, credit bureaus, lenders, and fintechs can unlock new opportunities for themselves and the underserved markets they serve. Consumers can gain better access to credit, while lenders can make more informed credit decisions. Ultimately, incorporating an alternative credit data API can help lenders enhance their risk decisioning capabilities in today’s uncertain times. 

Tell a more comprehensive story about consumers’ credit histories 

Assessing a consumer’s ability and willingness to pay is more precise when you have more pieces of the puzzle. An alternative credit data API can provide visibility into consumers’ incomes and saving and spending behavior. Traditional sources don’t always give lenders the data they need to make informed lending decisions, leaving people locked out of credit opportunities. 

Alternative data sources bring employment data, utility bill payments, bank account data, rent, and more into the mix to improve credit risk decisioning. They can paint a broader picture of a borrower’s credit history and open doors for more consumers. 

 

WATCH NOW >> Innovative Applications of Alternative Data Across the Financial Services Customer Lifecycle

 

Expand the pool of potential customers

Credit scoring models that incorporate alternative data can potentially increase the pool of scorable customers and make credit access more inclusive. Since 2013, Vantage Score has included alternative data in its credit model, exposing lenders to a new group of potential borrowers. By considering payments for everyday expenses, Vantage can score 40 million more consumers than conventional credit scoring models. 

One particular group that stands to benefit from alternative credit scoring models are gig workers, whose income-earning activities are non-traditional. With the gig economy rising by 15 percent over the last decade, lenders can expand their business and turn gig workers into creditworthy borrowers with greater visibility into their credit histories and ability to pay. Making alternative data available at scale via a credit data API unlocks a more precise assessment of creditworthiness and greater financial inclusion. 

Alternative data can help lenders expand their business to the growing pool of gig workers, which has risen by 15% over the last decade.

Incorporating alternative credit data is no longer just an alternative 

Not only does using an alternative credit data API provide a more comprehensive assessment of consumer financial behavior, but it’s also more conducive to current and future market conditions. The economic downturn has caused lender standards to tighten as traditional scoring data becomes less reliable. Alternative credit data can supplement traditional risk scoring, bringing greater efficiency and clarity to risk decisioning and enabling lenders to continue serving more borrowers. 

Empower your credit data API with reliable alternative data

Multiple options exist for obtaining alternative credit data APIs, as the availability of non-traditional data is growing across credit bureaus, data aggregators, and software platforms for banking and lending. The best solutions offer a straightforward data integration, an intuitive user interface for consumers, and a secure connection directly to the data source.

Urjanet’s alternative credit data API allows you to request utility and telecom data directly from the provider. It seamlessly integrates into your credit modeling process, giving you access to up to 12 months of payment history that can support lending decisions. 

Ready to see how an alternative credit data API can help your business? Speak with one of our experts today.

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