Building Consumer Credit

Every year, an increasing number of Americans are turning to alternative credit sources. For ten years, the Financial Health Network 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.

Consumer Credit