While obtaining credit can be an overwhelming aspect of being an American consumer, there are a significant amount of individuals who choose not to have a credit card or bank account, or who have low credit scores. These underbanked consumers often have a difficult time getting necessary loans to make ends meet, but now, more businesses are reaching out to them.
American Banker says the underbanked population represents a large percentage of individuals. For this reason, businesses need to focus on consumers and their needs in order to provide them with the financing they are looking for. Additionally, the increasing number of underbanked means that the rise of alternative credit
data is replacing traditional consumer credit reports
, states the source. Products such as Microbilt's PRBC Consumer Report can help lenders determine a borrower's eligibility for loans by looking at other information, such as property, employment and bank account records. Prepaid cards are another product that businesses can use to reach the underbanked. According to a recent report released by Packaged Facts, in 2012, prepaid credit card usage should increase by 22.4 percent, approximately $45 billion more than last year, says Marketing Daily. These cards are viewed as a stable method of payment for those who don't have bank accounts or do not use traditional credit cards, says the website.