How Experian scores thin-file borrowers with cash-flow data

Lenders are broadening their target audiences, often considering borrowers that don’t have a long track record with credit bureaus. Experian is trying to address this challenge by considering alternative data to provide a more holistic picture of a consumer’s financial health. 

The credit reporting bureau is partnering with data aggregator Plaid to combine cash-flow data and credit analytics for lenders.

Experian already uses cash-flow data shared by consumers for its Experian Boost service, but the partnership will build separate “cash-flow credit scores” for lenders upon request.

One use case for cash-flow underwriting is helping individuals like recent college graduates or immigrants with a “thin credit file” get approved for better loans.

“Banks are asking for this data because…