With consumer credit back in bloom, alternative data providers such as Experian and Equifax are hoping to fill in the blanks on loan applicants who may not have traditional credit reports. The firms probe an applicant's history with landlords, utilities, public courts, and other sources in hopes of helping lenders gauge a consumer's ability to repay. They and supporters say late rent payments and utility bills are reported by collections agencies and hurt consumers' credit ratings, yet on-time payments are not being counted to help them. Millions of Americans, including young adults and new immigrants, have flimsy credit files -- if they have one at all. While providers of alternative data hope to widen access to consumer credit, there no doubt will be some applicants who are turned away because of what their alternative data reveals. Consumer advocates are especially worried about negative utility payment information. "In the cold-weather months, those bills go sky high," notes Chi Chi Wu of the National Consumer Law Center. "People have trouble paying that for a few months, but then they catch up. And we're concerned that those spikes of late payments are what's going to hurt low-income consumers if we have regular monthly utility reporting."
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