In a follow on piece to a story released early this week, Gillian White of The Atlantic examines the potential pros and cons of including full-file (positive and derogatory data) non-financial payment data (so-called alternative data) in consumer credit files. This is one of the better pieces of journalism I have seen in the 15 years I have dedicated to this policy issue, and deserves to be read by a wide audience including federal policymakers, regulators, and industry leaders.

Credit Invisibility is a real problem in America and around the world. It keeps millions in this country trapped in poverty, and forces them to have their real credit needs met by pawn shops, pay-day lenders, and check cashing services. Credit Invisibles are 25% more likely to experience economic hardships including an inability to pay for prescription drugs and experience food uncertainty owing to their debt service burdens.

The CFPB recognized this problem in their seminal report on Credit Invisibility. Happily, there is a solution–the Credit Access and Inclusion Act plus industry leadership in aggressively furnishing/collecting/using non-financial payment data for underwriting. This outcome will not happen without leadership from industry to build the political will to remove regulatory uncertainty that currently prevents many energy utility, property management, and media firms from full-file reporting to nationwide consumer reporting agencies. ​