Businesses use credit scores and reports as a common technique to evaluate a customer’s financial reliability when receiving a loan. People with good reports can go on to receive lower interest rates on loans and mortgages, among many other benefits. Unfortunately, 1 in 3 adult Americans face obstacles when trying to obtain credit because of either limited credit histories or total credit obscurity. Most of the people in these categories have either not been able to open credit lines due to age or life circumstances (such as young people, divorcees, or immigrants). Therefore, marginalized groups tend to suffer more commonly from low credit histories. 

The long term costs for having higher interest rates add up to be quite substantial. For example, a homeowner with a subprime credit score might pay an extra $32,000 in interest over the course of a 30-year mortgage. The financial strain also extends to loans for used cars and emergency situations, with thousands of dollars in interest costs being added to the bill. Therefore, it would help millions of Americans to begin extracting financial history data from information that is not included in traditional credit reports. Using this alternative data could help score up to 32% of previously unscorable customers.