The news: Equifax launched OneScore, a machine learning-powered credit scoring model for US lenders that uses alternative data like utility bills and subscription TV payments to measure creditworthiness, per a press release. The score can be combined with traditional credit histories and data from Equifax-owned alternative credit scoring systems DataX and Teletrack.
What this means: Card issuers can use OneScore to improve credit access while appropriately gauging risk—helping meet the growing demand for credit cards. Credit card applications rose last year despite a slowdown in overall credit applications, according to the Federal Reserve Bank of New York.
Zooming out: There’s been a bigger push to improve financial inclusion in the credit system and recognize how financially diverse US consumers are. Many consumers break the one-size-fits-all mold that the traditional credit scoring system was built on decades ago.
Equifax’s offering can help card issuers gain more visibility into consumers’ financial habits to make more informed credit decisions and expand their pool of cardholders, which can help drive financial inclusion.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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