Working Smarter, Not Harder: Using Alternative Data to Fill in the Blanks

Working Smarter, Not Harder: Using Alternative Data to Fill in the Blanks

Authors: Solomon Semere and Dara Duguay

Underwriting the Invisible: Anything but Elementary

For microlenders, the effort involved in underwriting borrowers who are unable to qualify for mainstream credit because they are credit invisible (lacking a credit history), is rigorous and time consuming. Without a traditional credit profile, lenders are forced to become detectives in order to track down information that can assist them in making a credit decision. These range from searching government websites for state and county tax liens, calling landlords and tracing addresses to obtain a renter's history to following a non-existent paper trail for automobile and land purchase.

On top of the actual footwork to secure this information, everything then must be verified. Sometimes the information is not accurate because the customer does not have the correct details or has forgotten a particular transaction or is too ashamed to share negative information. For all these reasons, this method is time consuming and often frustrating.

Sherlock Holmes: Out of a Job?

However, there is an easier way. LexisNexis® Risk Solutions has a credit report called RiskView™. "LexisNexis is going to take away the Sherlock Holmes part of my job," says Emi Reyes from the Latino Economic Development Center (LEDC) in Washington, D.C., who believes that thanks to RiskView™, she will have less research to do.


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