ATLANTA, June 5, 2019 /PRNewswire/ -- On the heels of the
10th anniversary of the Great Recession, a larger
segment of the U.S. population than ever before has average to
damaged credit combined with positive financial capacity measures
such as low debt to income (DTI) ratios. These households could be
an untapped source of new growth for communication providers, which
may not be obvious when looking only at traditional credit
scores.
A recent study conducted by Equifax reveals that 42 million U.S.
consumers in 2018 had damaged credit scores (i.e near-prime or
sub-prime) and also had a "best" financial capacity profile (i.e.
less than 30% DTI ratio). That could mean they have the disposable
income available to afford a smart phone upgrade or wireless plan
which represents 13.6 million more new consumers (than in 2008)
that carriers may need to reconsider as qualified prospects.
Prior to the Great Recession, communications service providers
(CSPs) relied solely on credit scores to make application
decisions. Ten years later, this model has not changed. However,
the mobile device market has become more saturated with an average
of 1.2 mobile devices per U.S. citizen or over 400 million devices.
The communications market is now more competitive than 10 years ago
and CSPs may be missing out on opportunities to upsell and cross
sell devices and services if they are not leveraging additional
data sources in addition to the credit score.
"The recovery from the recession has been uneven across
generational segments with lingering effects on many consumers'
credit profiles, but also opens up the opportunity to identify new
emerging segments of qualified customers – if CSPs assess them more
holistically across multiple financial and behavioral
attributes," said
Alison LeBreton, Vice President
Marketing, Communications and Digital Media, Equifax. "We are
operating in a new economy that calls for new tools and more agile
approaches to better serve consumers as they manage their financial
lives."
Reviewing debt-to-income ratios and other forms of alternative
data are examples of these new tools as consumers with 'best'
financial capacity profiles may be able to lean into the credit
economy with more and better offers from wireless providers.
"Financial institutions are highly aware of how to use
alternative data in assessing risks to their portfolio," said
Kenneth Ray, SVP, Communications and
Digital Media, Equifax. "All communication providers might take
note and assess additional tools to better serve consumers with
more information and agility."
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ABOUT EQUIFAX INC.
Equifax is a global data,
analytics, and technology company and believes knowledge drives
progress. The Company blends unique data, analytics, and technology
with a passion for serving customers globally, to create insights
that power decisions to move people forward. Headquartered in
Atlanta, Equifax operates or has
investments in 24 countries in North
America, Central and South
America, Europe and the
Asia Pacific region. It is a
member of Standard & Poor's (S&P) 500® Index, and its
common stock is traded on the New York Stock Exchange (NYSE) under
the symbol EFX. Equifax employs approximately 11,000 employees
worldwide. For more information, visit Equifax.com and
follow the company's news
on Twitter and LinkedIn.
Media contact:
Wyatt Jefferies
404-885-8907
wyatt.jefferies@equifax.com
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SOURCE Equifax Inc.