But that might be changing.
CNN Money reports that Experian recently released a report on “unscoreable” consumers, and it turns out that they might not be such a huge credit risk after all.
Who Is Unscoreable?
If you haven’t used much credit, and you don’t have much of a paper trail to show your financial habits, you might be considered unscoreable. In many cases, according to CNN Money, unscoreable consumers are often college graduates and immigrants. You might also be considered unscoreable if you haven’t had an active credit account for more than six months.
[Free Resource: Check your free credit report and score]
Experian put together a report on unscoreable consumers and found that many that fit this description have professional jobs, and might even be retired. On top of that, 40 percent of them are homeowners. As a result, it appears that these unscoreable consumers might actually just the sorts of people lenders want to work with.
What’s Being Done to Score the Unscoreables?
The CNN Money article points out that VantageScore, the model created by the three major credit bureaus, is looking at 24 months of credit history, rather than stopping at six. On top of that, VantageScore is considering public records, utility payments, and rent payments when possible. (Experian started including rent in its own model not too long ago.) FICO claims that it can also use alternative information — like bank accounts — to score those with many consumers.
If lenders can woo the formerly-unscoreable, it might go a long way toward transforming the entire credit scoring industry.