topic Re: New blog article: What Is Alternative Data? in General Credit Topics

New blog article: What Is Alternative Data?

Elizabeth_FICO — Tue, 16 Aug 2022 18:06:42 GMT

Hello everyone! If there's a new blog article that I think you guys might like I plan on posting it in the Forums.

This week's article is: What Is Alternative Data?

Let me know what you think about the article.

For more content don't forget to check out our blog.

Re: New blog article: What Is Alternative Data?

Anonymous — Wed, 17 Aug 2022 12:44:07 GMT

A question that enters my mind is, in the event of errors related to the reported information does the consumer have recourse in correcting it?

Re: New blog article: What Is Alternative Data?

TheKid2 — Wed, 17 Aug 2022 13:30:40 GMT

The blog explains how they will access "Utility, phone and rent payments", but does not explain how they would access other alternative data listed:

- Income and expenses

- Checking and savings account balances

- Debit and credit card transactions

I am now aware of any service that will provide information like that to potential lenders and the blog does not explain how FICO would get that information. It's actually quite scary that some of this would be saved and tracked by a 3rd party.

Re: New blog article: What Is Alternative Data?

ISOgoodTacos — Wed, 17 Aug 2022 16:17:46 GMT

@TheKid2 wrote:
The blog explains how they will access "Utility, phone and rent payments", but does not explain how they would access other alternative data listed:

- Income and expenses
- Checking and savings account balances
- Debit and credit card transactions

I am now aware of any service that will provide information like that to potential lenders and the blog does not explain how FICO would get that information. It's actually quite scary that some of this would be saved and tracked by a 3rd party.

Some of these lesser known bureaus might already be collecting or working on collecting that kind of information.

CFPB List of consumer reporting companies

Re: New blog article: What Is Alternative Data?

TheKid2 — Wed, 17 Aug 2022 16:35:27 GMT

@ISOgoodTacos wrote:
Some of these lesser known bureaus might already be collecting or working on collecting that kind of information.

CFPB List of consumer reporting companies

Thanks for that link and helpful, but looking there I don't see anyone collecting information with the details called out in this blog. Specifically, nobody appears to be collecting:

- Income and expenses

- Checking and savings account balances

- Debit and credit card transactions

Granted employment screening may include salary, but it won't show all of my income and deifnitely not all my expenses. The details on the balances of my bank accounts plus the specifics on my debit and credit card transactions are particularly alarming.

Re: New blog article: What Is Alternative Data?

Credit12Fico — Thu, 18 Aug 2022 01:42:39 GMT

@TheKid2 wrote:
The blog explains how they will access "Utility, phone and rent payments", but does not explain how they would access other alternative data listed:

- Income and expenses
- Checking and savings account balances
- Debit and credit card transactions

I am now aware of any service that will provide information like that to potential lenders and the blog does not explain how FICO would get that information. It's actually quite scary that some of this would be saved and tracked by a 3rd party.

Your "EWS" report contains info of checking and savings account balances and transactions if the bank you have reports to EWS (many of the big banks do).

Re: New blog article: What Is Alternative Data?

SweetCreditObsession — Thu, 18 Aug 2022 21:51:05 GMT

@Elizabeth_FICO, thank you for sharing this. I'm not excited about alternative data. On the other hand, there's not enough education or discussion about the alternative credit agencies. They are scary, especially when an individual is a victim of identity theft as these organizations are sometimes leveraged by fraudsters to get access to their services that fly under the radar of the big three CRA. Consumers have minimal recourse if there are errors and there are at least 52 of them per the CFPB in 2022.

Re: New blog article: What Is Alternative Data?

TheKid2 — Thu, 18 Aug 2022 12:07:16 GMT

@Credit12Fico wrote:
Your "EWS" report contains info of checking and savings account balances and transactions if the bank you have reports to EWS (many of the big banks do).

Thank you, this has been very educational. I didn't know about this report and have another report to request/review!

"Early Warning Services" report is designed to prevent bank fraud, which appears to be a good thing. This is used when opening bank accounts. I would like to understand how FICO XD would access, store, and score this data for lenders. IMO it's a fairly significant leap to go from accessing this data for opening a bank account to getting it applying for credit. The more access to any data increases the risk that the data will be compromised.

Re: New blog article: What Is Alternative Data?

SweetCreditObsession — Thu, 18 Aug 2022 21:53:00 GMT

@TheKid2 - I couldn't agree with you more. I don't see why FICO should monitor my opening bank accounts. The big 3 aren't protecting our information enough as it stands, e.g., think data breaches and how it's been reported that others can unfreeze your credit reports.