Alternative data include factors such as liens, business ownership and attendance at a two- or four-year college, according to Semere.
Equifax on Dec. 20 reported success with another type of alternative data that it planned to bring mainstream. The credit bureau plans to incorporate "Buy Now, Pay Later" results into credit reports for consideration, calling itself the first agency to standardize this process. The term refers to buying goods on interest-free installment plans.
The BNPL data gave customers with "thin" (two or fewer entries) or "young" (two years or less of credit history) credit files a 21-point gain in FICO. It also helped consumers with previous late payments improve their scores 13 points.
King called two categories of alternative data particularly relevant for auto loans. The first involved credit-seeking behavior not visible to credit bureaus, such as applications for online and subprime loans and checking accounts.
The other involved what he called "credit life event data," something he said was "really impactful in the auto space." This included professional licensing and stable rental history, King said.
Some consumers experience the traditional credit-building history that starts with a first bank account during childhood, CU 2.0 founder Kirk Drake said during the Scienaptic webinar.
"That traditional path doesn't necessarily exist for a huge portion of our population," said Drake, who earlier observed that a percentage of consumers don't see a difference between a bank account and a prepaid debit card.