Credit invisible consumers have a new way to build credit. Experian Go is a new app that helps consumers land a credit score in minutes.
Credit scoring company Experian is trying to help the roughly 50 million Americans who have little to no credit. Many are females who have been shut out of the financial marketplace, making it difficult to get a credit card, car loan, or even an apartment lease.
To address these tens of millions of credit invisible Americans, Experian recently launched Experian Go, a free digital tool that lets consumers create a credit report, and get a credit score in a few minutes. Experian estimates 28 million consumers are credit invisible or don’t have a credit history. An additional 21 million don’t have enough established credit to garner a score. The problem is more common in communities of color with 1 in 5 Black consumers and one-third of Hispanic consumers dealing with a lack of credit. A majority of both groups are unsure how to establish or improve their credit.
“Credit invisibility is a critical issue,” says Rod Griffin, Senior Director of Public Education and Advocacy at Experian. “If you don’t have access to the traditional financial system you typically face higher costs of borrowing and predatory lending.”
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HOW IT WORKS
To get started you download the Experian app and enroll in a free membership. Your identity is authenticated by providing a photo of a government-issued ID, social security number, and selfie.
You are then invited to add tradelines or credit accounts to your file, which Experian will use to generate a credit score. Through Experian’s Boost program consumers can add on-time utility, telecom, and streaming service payments, which can instantly improve their credit score. That feature, which is popular with consumers, gives people with no previous credit history an average FICO credit score of 665.
For consumers with no credit history, the app will provide credit card offers specifically designed for people establishing a credit history. The idea is to put consumers in front of credit card offers they will actually get approved for. Experian is providing access to credit cards from Capital One Financial and Petal, a fintech that lends to consumers with little credit history. Those financial firms pay Experian for the leads.
BUILT-IN EDUCATION COMPONENT
Equally important, consumers will have access to continuing education about how credit works and will receive recommendations to build their credit including free access to Experian credit reports and credit monitoring. While financial inclusion has long been a problem in America, Experian says it’s able to offer this service now because technology makes it easier to reach the masses. “Historically credit invisible communities didn’t have access to computers or the ability to create credit history filling out paper applications,” says Griffin. “Now everyone is carrying a cell phone and can use the cell phone to take advantage of new tools and resources.”
The effort on the part of Experian is part of a push by all three credit reporting firms, which also includes Equifax and Transunion, to amass as much data as possible on consumers. The firms can turn around and sell more detailed credit reports to lenders.
WHO CAN IT HELP?
Experian Go is specifically designed for people with little or no credit. That makes this service attractive to college students, people who have shunned debt, immigrants, and Black and Hispanic adults.
Experian has been piloting Experian Go since October and has already helped over 15,000 credit invisible consumers establish credit and become visible to potential lenders. Is the latter part, that may prove valuable to consumers. “It’s primarily a tool of convenience for consumers who have little or no established credit,” says Bruce McClary, a spokesman for the National Foundation for Credit Counseling. “At the same time, it exposes them to opportunities to build their credit. Its blending a credit report with a credit marketplace and educational tools.”
None are these things are brand new, but McClary says the packaging is the important piece of this service. In the past if you pulled your credit report and saw a hit on it you would have to dig around to figure out what is hurting your score and then identify ways to fix it. With the Experian Go, the app provides those opportunities to build your credit without having to do any legwork. “They are connecting consumers to a range of options they can explore and decide for themselves to use,” says McClary. “Its interesting that it only matches consumers with a range of credit offers they would quality for. There’s not that mystery of going to a credit card company website putting in all your information only to find out you may not qualify.”
MORE ON HERMONEY:
- The 5 Easiest Ways To Build Your Credit Score
- 10 US Cities With The Highest Credit Scores
- How to Improve Your Credit Score to Buy a Home
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