There are so many ways in which the world is simply unfair. As much as we would like for it to be, the way society functions is unjust in a multitude of areas, one of which is the area of finance, and specifically credit. 

Credit scores can be incredibly important for building a solid financial future. Those with the best credit scores also get the best interest rates, the best payment plans, the best emergency financial services, etc. They can pay thousands less on a mortgage or car loan than those who go into the loan with a poor or no credit score. In fact, having a credit score is a vital part of even qualifying to make the biggest purchases, like vehicles and houses. 

However, there are millions of Americans who have little-to-no credit history at all, and they are struggling to be able to get on the merry-go-round that is the powerful “credit score.” Ninety-two million Americans have little-to-no credit history, 67 million have “thin credit file”, and 25 million are considered “credit invisible.” 

These individuals are most likely to be young, minorities, immigrants, divorced or widowed, and use debit cards or cash more than anything else. Another sixty-three million Americans are also unbanked or underbanked, which leaves them to use things like check cashing services or pawn shop loans, which can pack a hefty punch to the wallet. 

Fortunately, there is a way for these millions of Americans to actually get an accurate credit score. By including alternative data in credit reports, 90% of previously unscorable individuals could finally receive a credit score, and nearly half of them would actually be prime or near prime borrowers. 

No credit history is not synonymous with poor financial decisions, but it can be instrumental in creating copious amounts of unnecessary financial hardships. Allowing the use of alternative data frees up individuals to be scored by their actual financial status and can significantly impact their financial future for the better.