As the number of consumers who are considered to be underbanked increases, financial institutions are considering how they can work with these individuals who do not have traditional bank accounts or credit and debit cards. Luckily for these consumers, alternative credit
data and other resources are helping lenders determine the creditworthiness of borrowers. According to the Sacramento Bee, there are several obstacles in the way for many American consumers when it comes to opening an account or applying for a card. An FDIC study found that individuals say they do not have enough money to qualify for an account, or they simply do not see a need to open one. Some consumers stated the associated fees and costs were too much. Pawn shops, short term lenders and other forms of alternative finance
are proving to be viable options for the underbanked individuals, reports the source. Lenders can also rely on alternative credit data to determine a consumer's creditworthiness. These scores, such as Microbilt's PRBC Consumer Report, look at other records of an individual, including employment, property and bankruptcy. This information can help lenders measure the amount of risk posed to the company, while at the same time helping a consumer gain access to credit.