Experian: Credit Builders Alliance Drives Progress for Often Overlooked Consumers

New data demonstrates value of credit access and education in helping unscoreable and subprime consumers progress in the mainstream financial ecosystem

Experian, a leading global data and technology company, today released a new analysis highlighting the impact Credit Builders Alliance (CBA) tradelines have in helping credit-challenged consumers improve their financial standing and gain access to mainstream credit products.

The analysis showed, of previously unscored borrowers, 70% of consumers with a CBA tradeline reached prime or near-prime status within one year — outperforming the 48% of unscored U.S. borrowers who achieved the same. In addition, consumers starting from deep subprime credit tiers who had a CBA tradeline on their credit report saw an average 48-point increase within a single year.

“This data reinforces what we’ve long believed: When underserved consumers are given the opportunity to participate in the mainstream credit ecosystem, they rise to the occasion,” said Dara Duguay, CEO of Credit Builders Alliance. “CBA tradelines are a crucial bridge for helping people who’ve been excluded from the financial mainstream build the credit history they need to achieve lasting stability.”

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A closer look: understanding consumers served by CBA member organizations

CBA is a national nonprofit network that helps low- and moderate-income individuals and families build credit and achieve financial independence. Through partnerships with Experian and other major credit reporting agencies, CBA enables nonprofit lenders and community organizations to report loan performance data, offer credit-building tools and provide financial coaching that empowers consumers to reach their financial goals.

Clients served by CBA member organizations tend to start at a disadvantage compared to the general U.S. population with a lower average VantageScore^® (658 versus 724), higher credit utilization rates (75% versus 67%) and greater debt-to-income ratios (33% versus 19%). These borrowers represent a more financially vulnerable population.

The findings highlight how nonprofit and mission-driven lenders, including community development financial institutions (CDFIs) and financial capability nonprofits are helping consumers unlock financial opportunity by coupling responsible lending with financial coaching and education. These programs can help consumers overcome systemic barriers, build savings and unlock access to mainstream credit products.

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“This analysis highlights the importance of inclusive credit reporting and shows the positive impact organizations like CBA and their members can play in helping underserved consumers improve their financial lives,” said Molly Poppie, chief product and analytics officer for Experian’s Financial Services and Data Business. “We’re committed to helping bring financial power to all and are proud of our work that helps expand access to credit for those who have historically been left out.”

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