World-Wide Reach - Strong Local Presence!

PRESS RELEASE: CONSUMER FINANCIAL PROTECTION BUREAU EXPLORES IMPACT OF ALTERNATIVE DATA ON CREDIT ACCESS FOR CONSUMERS WHO ARE CREDIT INVISIBLE

credit lawsuits
CFPB logo

FOR IMMEDIATE RELEASE:
February 16, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

CONSUMER FINANCIAL PROTECTION BUREAU EXPLORES IMPACT OF ALTERNATIVE DATA ON CREDIT ACCESS FOR CONSUMERS WHO ARE CREDIT INVISIBLE
CFPB Seeks Public Feedback on Benefits, Risks of Using Unconventional Sources to Extend Affordable Credit to Consumers Lacking Credit History

Washington, D.C. – The Consumer Financial Protection Bureau today launched an inquiry into ways to expand access to credit for consumers who are credit invisible or who lack enough credit history to obtain a credit score. Traditional credit history includes a borrower’s payment of debts such as mortgages, credit cards, and other loans. It is used by lenders to decide who can get credit and what it will cost. The Bureau is seeking public feedback on the benefits and risks of tapping alternative data sources such as bills for mobile phones and rent payments to make lending decisions about consumers whose lack of credit history might otherwise block opportunities.

“Alternative data from unconventional sources may help consumers who are stuck outside the system build a credit history to access mainstream credit sources,” said CFPB Director Richard Cordray. “We want to learn more about whether this non-traditional approach can offer opportunities to millions of Americans who are credit invisible and how to minimize any risks in how this information is used.”

The Bureau estimates that 26 million Americans are credit invisible, meaning they have no credit history with a nationwide consumer reporting agency. Another 19 million consumers have a credit history that has gone stale, or is insufficient to produce a credit score under most scoring models. A credit score is drawn from a consumer’s credit report. A credit report may reflect if payments are made on time, what debt a consumer owes, and whether they have a debt or bill in collection. Credit reports can also include records such as liens, judgments, and bankruptcies, which can provide insight into a consumer’s financial status and obligations.

Typically, a credit score predicts the likelihood the consumer will repay a debt as agreed. A mathematical formula – the scoring model – is used to create the credit score based on payment record, amount of debts, and other factors. Each has a certain weight, and a credit score is calculated from this formula. A higher score usually makes it easier for a borrower to qualify for a loan and may garner a better interest rate. Most credit scores range from 300-850. Different lenders may use different scoring models, so a consumer’s credit score can vary from lender to lender.

Without a sufficient credit history, consumers face barriers to accessing credit, or pay more for credit. This problem disproportionately impacts consumers who are Black or Hispanic, and people who live in low-income neighborhoods. It also impacts some recent immigrants, young people just getting started, or people who are recently widowed or divorced who don’t have enough credit history on their own. Underserved consumers often resort to high-cost loans that aren’t reported to credit reporting agencies, which may not help build a credit history.

For some consumers, the use of unconventional sources of information, called “alternative data,” may be a way to gain access to credit to build a credit history. Alternative data draws from sources such as bill payments for mobile phones and rent, and electronic transactions such as deposits, withdrawals or transfers. This information could show a track record of meeting obligations that may not turn up in a credit history. As a result, some who now cannot get reasonably priced credit may see more access or lower borrowing costs. The Bureau is also exploring risks posed by alternative data that is inconsistent, incomplete, incorrect, overgeneralized, or biased. Such flaws could adversely affect credit access for low-income and underserved populations, or others. The CFPB’s Request for Information seeks insights into the benefits and risks of alternative data and the techniques used to compile and analyze it. Specifically, Bureau will explore topics including:

  • Access to credit: The CFPB seeks information about whether using alternative data to create or augment a credit score could increase access to credit by helping lenders better assess consumer creditworthiness. For instance, a consumer without a scored credit history may still pay bills on time for utilities or mobile phones. This might reassure lenders that they are viable credit risk. Some lenders might not lend to a consumer with a credit score less than 620. However, they might do so if alternative data suggests they are less of a risk for defaulting on the loan. 
  • Complexity of the process: The CFPB is looking at whether the use of this information could make credit decisions more complex for both consumers and industry. This process includes lenders who must notify consumers about credit decisions and financial educators helping consumers grasp their credit standing. The Bureau is examining whether the added complexity makes it harder for consumers to understand and take control of their financial lives.
  • Impact on costs and service: The CFPB is looking into the impact of the use of alternative data, new ways to analyze it, and new technologies on costs and services in credit decisions. The Bureau is studying if this may help produce a faster application process, lower operating costs for lenders, and lower loan costs for borrowers.
  • Implications for privacy and security: The CFPB is looking into privacy and security issues in the use of alternative data that contains sensitive personal information. Consumers may not know that it has been collected and shared or how it will be used in the credit process. The Bureau will also explore whether some data are more prone to errors because of weaker or different standards than data traditionally used in credit decisions, and whether consumers can correct errors in this information. 
  • Impact on specific groups: The CFPB is looking into whether the use of alternative data could affect certain groups or behaviors in unpredictable ways. For example, members of the military may frequently move, which might give a false impression of personal instability that would affect whether they can get credit. The Bureau is also studying the impact on fair lending of using data that may be correlated to a person’s race, ethnicity, gender, or other attribute, and how such risks could be managed. 

The CFPB Request for Information can be found here: http://files.consumerfinance.gov/f/documents/20170214_cfpb_Alt-Data-RFI.pdf

###

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Click here for reuse options!
Copyright 2017 Sevilla Local Media Digital Marketing & SEO Services

Have any Question or Comment?

Leave a Reply

Like & Follow Us on Social Media!

Subscribe!

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 3,834 other subscribers

What People are Saying!

 

“Hands down, the best!”

– George Farjeat of Farjeat Insurance

“Great value and return on investment”

– Ines Calderon of Adriana’s Insurance

“Tommy is the king of social media!”

– Rocky Patel of Rocky Patel Premium Cigars

“Best investment I’ve ever made”

– Dale Roley of Roley’s Tree Care

“…great job in increasing my exposure…”

– Mark Cantrell, Law Offices of Mark Cantrell

 

Upcoming Live Music

No shows booked at the moment.

Featured: Susie Garcia & Las Colibri

Featured: Viento Callejero with Marlene Beltran

Good SEO Management is crucial for your online rankings. Linkio is a powerful automation tool for backlink planning that takes the repetitive and tedious work out of setting up link building campaigns.

RSS Alexa Blog

  • The Importance of Targeting in Marketing (And How to Include It in Your Strategy)
    When it comes to marketing, if you’re trying to talk to everybody, you’re going to have a difficult time reaching anybody. Vague and generic messages are far less likely to resonate with audiences than specific, direct communication – which is why targeting in marketing is so important. What Is Targeting in Marketing? Targeting [...] The […]
  • How to Define and Measure Marketing Objectives: A Start-to-Finish Guide
    At the core of any great marketing plan is a list of strategic and clear marketing objectives. Marketing objectives are a brand’s defined goals. They outline the intentions of the marketing team, provide clear direction for team members to follow, and offer information for executives to review and support. Marketing objectives are a pivotal part of […]
  • 8 Reliable Blog Marketing Promotion Ideas
    When you get done writing an epic, in-depth blog post and finally hit the publish button, you feel a sense of accomplishment; you feel like your content marketing work is done. But that’s not the case. Your work is only halfway over. Now, it’s time to work on blog marketing. Blog Marketing Is Just As Important […]
  • Here’s How to Handle Niche Marketing
    If you’re in an industry that feels oversaturated with other businesses and competitors, standing out can sometimes seem impossible. But differentiating your brand in a crowded market is achievable with niche marketing. What Is Niche Marketing? Niche marketing is a selling and advertising strategy that focuses on a targeted sector of a market. Instead of […]
  • Create More Shareable Content With This Checklist and 7 Helpful Tools
    To get as many eyes as possible on your content, it needs to be shareable. Shareable content quickly spreads around the Internet as audiences connect with a topic, idea, or story and click to share it with their friends and followers. If you want your content to have a large reach and get maximum exposure, […]

RSS Search Engine Watch

  • Overcoming 4 black hat SEO techniques that spammers and scammers use to harm your search rankings
    The dark side of SEO can be crippling to a business if they aren’t aware of how to fight back. Here are four negative (or black hat) SEO tactics to keep a keen eye out for, and how you can protect your site – and your business – from being a victim.
  • 4 local SEO strategies for small and medium businesses
    For small and medium businesses who want to compete on the same playing-field as much larger corporations with greater resources at their disposal, having a strong local SEO strategy is crucial.
  • How can you determine your website’s authority, and what can you do to improve it?
    The Domain Authority metric was developed by Moz as a means of quantifying your website's relative importance as a whole - its authority. Like most SEO metrics, this number fluctuates based on several factors, and to improve your authority, you first need to determine where your website stands among the others online.
  • How videos generate quick SEO results
    You might not be a media and content-oriented company, but you should still consider the perks of having videos for your products and services. According to MWP, online video now accounts for half of all traffic on mobile alone, and 59% of senior executives say that they will opt for video when given the choice […]
  • The 2018 guide to rich results in search
    Rich results are the search results which have a little extra panache, in which Google displays more information about the result rather than just the traditional title, URL and meta description. In this guide, we'll look at what's new with rich results in 2018, as well as how to give yourself the best chance of […]

RSS Search Engine Land

  • SearchCap: Google mobile-first index expanding, Google reviews spam & Gboard update
    Below is what happened in search today, as reported on Search Engine Land and from other places across the web. The post SearchCap: Google mobile-first index expanding, Google reviews spam & Gboard update appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • Making your first AMP Story: Google’s answer to Snapchat and Instagram
    With Google ready to launch AMP Stories soon, Contributor Paul Shapiro shares how to build your own AMP Story and get in front of the latest content trend. The post Making your first AMP Story: Google’s answer to Snapchat and Instagram appeared first on Search Engine Land. Please visit Search Engine Land for the full […]
  • Law firm that used contest to solicit Google reviews sees all but one disappear
    Incentivizing reviews individually or 'in bulk' is a bad idea. The post Law firm that used contest to solicit Google reviews sees all but one disappear appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • Latest updates to Gboard for Android include a ‘search all media’ feature
    Reports indicate the latest refresh for the Google-designed keyboard comes with a new interface that allows users to search all categories. The post Latest updates to Gboard for Android include a ‘search all media’ feature appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • What does it mean to be Agency of the Year?
    How the 2017 SEO and SEM Agency of the Year Search Engine Land Awards winners approach success and what the recognition has meant to their agencies. The post What does it mean to be Agency of the Year? appeared first on Search Engine Land. Please visit Search Engine Land for the full article.

RSS Local Business Locator Blog

  • Sevilla Local Media: www.SevillaLocalMedia.com
    SEO Services United States – Internet Marketing – SEM – Social Media – PPC – Website Development – Website Optimization Hand submitted citations and no outsourcing to foreign companies – Best SEO company in United States – 1st Page of Google Guaranteed. RIVERSIDE, CALIFORNIA, UNITED STATES, January 9, 2018 / SEO – SEM – Website […]
  • We Support This Cause! Please Donate
    Click Here to Donate to this Cause!       Cathy Bishop Fragoso, a Riverside County Social worker/Supervisor (DPSS) for more than 20 years – a mother, grandmother and widow – suffered catastrophic injuries when illiegal street racers, in 2 separate vehicles, slammed into the vehicle she was a back passenger in, with one car […]
  • New Escape Room Open in Los Angeles, California
    December 17, 2017   Sevilla local Media 4865 Jackson St. Riverside, Ca 92503   FOR IMMEDIATE RELEASE: New Escape Room in Van Nuys, California – Los Angeles County The L.A. Dragon Escape Room, located in Van Nuys, California in Los Angeles County, is conveniently located near Thousand Oaks, Simi Valley, Pasadena, Burbank, Glendale and Santa […]
  • Consider Supporting This Cause: Cathy Fragoso Medical Fund
    Click Here to Donate to this Cause!       Cathy Bishop Fragoso, a Riverside County Social worker/Supervisor (DPSS) for more than 20 years – a mother, grandmother and widow – suffered catastrophic injuries when illiegal street racers, in 2 separate vehicles, slammed into the vehicle she was a back passenger in, with one car […]
  • Meet HAMLET PAREDES the “Tabaquero” @ Zafutos Cigar Haven in Ontario, Ca
        Hamlet Paredes in person @ ZAFUTOS on Friday, December 15, 2017. Hamlet will be rolling cigars. There will be raffles, refreshments and cigar deals! 990 Ontario Mills Dr., Suite E Ontario, Ca 91764

RSS LBL Blogspot Feed

RSS Music Connection

  • Christopher Cross and the Pacific Symphony Orchestra at Segerstrom Center for the Arts in Costa Mesa, CA February 21, 2018
    Not all artists and orchestra go together, but Christopher Cross and the Pacific Symphony Orchestra were a perfect pairing at Segerstrom Center for the Arts in Costa Mesa, CA. With Valentine's day earlier in the week, it was fitting for the orchestra to play romantic songs which came from major movies like Lady and the Tramp, An Affair […]
  • Squirrel Nut Zippers to Host PledgeMusic Album Release Show February 21, 2018
    Squirrel Nut Zippers will be hosting a private party and performance this Sunday, Feb. 25 at Swing House Studios in Los Angeles, CA. There will be a full album playback of their upcoming album BEASTS OF BURGUNDY (out March 23) with casual food and drinks served in classic Zippers style, followed by a very intimate performance and […]
  • Signing Story: The Cuckoos February 21, 2018
    I was immediately drawn to the energy and quality songwriting of the Cuckoos and loved the EP from the first time I heard it. I thought, “I need to work with this band, as they have real potential.” That’s what Mark McQuillan, music distributor Republic of Music’s managing director, thought after attending a summer concert […]
  • Matthew Stubbs And The Antiguas - Matthew Stubbs and The Antiguas (8/10) February 21, 2018
    AMAZING live-sounding production––like the band is right in front of you! Stubbs has released a classic album of instrumentals that references the best elements of blues, surf, jazz, garage, soul and many other styles, with some of the tunes recalling Los Lobos’ borderline atonal clank. This is a record to be played LOUD at a […]
  • Bebe Rexha renews publishing deal with BMG February 20, 2018
    Multiplatinum hit singer/songwriter Bebe Rexha has renewed her worldwide co-publishing deal with BMG. Since initially signing with BMG and bursting onto the scene in 2013, Rexha has accumulated more than 11 million overall single sales, 3.35 billion total global streams and a radio audience of more than 10 billion. Her latest single, ‘Meant To Be’ […]

RSS Political News

  • Liberal Freakout: Congress Blindsides Obama Administration With Formal Investigation February 22, 2018
    Barack Obama’s legacy was already on thin ice after many of his signature programs were dismantled during President Trump’s first year in office, and concerns over bias emerged within the Department of Justice. Now, another blow to the 44th president’s White House tenure has come to light. While the bias concerns at the DOJ continue,… […]
  • MSNBC Trots Out Would-Be School Shooter in Disgusting Attempt to Push Gun Control February 21, 2018
    If it often seems that there is no level the Democrat-aligned media won’t stoop to in order to promote its leftist agenda. Case in point has been the aftermath of the tragic mass shooting at a school in Parkland, Florida during which the media has heaped lavish praise and copious coverage upon advocate-in-training teenagers who… […]
  • Teen Vogue Contributor Goes Off the Rails in Disturbing Attack on Billy Graham: “Have Fun in Hell” February 21, 2018
    Liberals are more tolerant, inclusive, and caring than the rest of the world — just ask them. That “tolerance” was on full display Wednesday, when an outspoken feminist and “Teen Vogue” columnist used the death of renowned Christian pastor Billy Graham to spread hatred. Lauren Duca, a columnist with a verified Twitter account and nearly half… […]
  • Florida Law Could Severely Punish Mayor for Pushing Gun Control February 21, 2018
    In the aftermath of the Parkland, Florida high school shooting that left dozens of students and teachers killed or wounded, gun control activists immediately mobilized to enact legislative change at the federal, state and local level, as they typically do after ever major gun-related tragedy. Unfortunately for them, they will be hard-pressed to enact change… […]
  • Schools Implement Brand New “Code Red” Procedures in Wake of Florida Shootings February 21, 2018
    The knee-jerk response to tragedies such as the recent Florida school shooting is often to pass new gun laws or ban the specific firearm used in the crime. While pundits and politicians ineffectively rant about what to do, however, some schools are taking matters into their own hands. Several facilities throughout the country are stepping… […]
Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.
%d bloggers like this: