Alternative data has the potential to benefit millions of consumers, whether they are “credit invisible” or they have impaired records with the traditional Big Three nationwide consumer reporting agencies or “credit bureaus” – Equifax, Experian, and TransUnion. However, alternative data is not without its risks.
Much of the analysis of whether alternative data will benefit or hurt consumers depends on several key factors:
- What kind of alternative data is being used?
- How is the alternative data being used?
- What is the accuracy and predictiveness of the data?
- What level of disparate