Building Consumer Credit

Every year, an increasing number of Americans are turning to alternative credit sources. For ten years, CFSI has been conducting research and seeding innovations to answer the question: What if people got the credit they deserve?

Consumer credit is a challenging issue for nearly 13 million American households. Because they lack sufficient credit history, these financially-underserved consumers have difficulty accessing traditional forms of credit and engaging in credit-building activities. This is not just a problem for the poor. Recent immigrants, young people on their own for the first time, those with damaged credit from the financial crisis, and many others with thin or no credit history face extreme challenges proving their creditworthiness to financial institutions.

Our research has brought to light several strategies to address the challenge, such as enabling companies to report more types of positive credit activities to credit scoring bureaus, and making more prevalent use of alternative credit data. 

In addition to documenting the need and exploring solutions through research, we invest in promising innovations in tandem with strategic partners, and we have defined what a high-quality small-dollar credit product looks like, using our Compass Principles framework

Top Resources 

2016 Financially Underserved Market Size Study explores the approximately $141 billion in fees and interest spent by financially underserved consumers in the U.S. during 2015 to borrow, spend, save, and plan across 28 financial products.

Our recent webinar Cutting-Edge Credit: Innovative Models in the Small-Dollar Credit Market discusses promising new credit models and trends in small-dollar credit. 

Applying Compass Principles to Credit Products and The Compass Guide to Small-Dollar Credit serve as tools to define quality for the credit industry.

A Complex Portrait: An Examination of Small-Dollar Credit Consumers discusses consumers’ varied uses of small-dollar credit products. ​

Know Your Borrower: The Four Need Cases of Small-Dollar Credit Consumers explores the financial needs that drive borrowers’ demand for credit.

Design Matters: Learning from Consumers’ Experiences with Small-Dollar Loans provides product design recommendations based on qualitative and quantitative research with SDC consumers.

What If People Got the Credit They Deserve? addresses the impacts of and alternatives for credit scoring.

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