The NAFCU Journal September-October 2019 - 40

INDUSTRY PERSPECTIVES

Help Approve More First-Time
Borrowers With Alternative Data
By John Flynn

D

espite what common wisdom
has been telling us, millennials are willing to borrow to
get what they want. They may
have come around more slowly than
other generations in the shadow of the
Great Recession, but many are seeing
the light and creating opportunities for
credit unions.

their predecessors. After exiting cities
to buy affordable homes in the suburbs,
millennials trail Generation X in homeownership by just 8 percentage points,
according to Business Insider, and the
gap continues to narrow. Millennials
now account for 42 percent of new
mortgage loans, surpassing Gen X for
the first time.

According to insurance comparison
site The Zebra, millennials are taking
out car loans more frequently than

Millennials are also opening more credit
cards. Initially, the Credit Card Accountability Responsibility and Disclosure

Act restricted marketing and the ability
to open credit cards. Millennials who
needed money instead turned to fintechs
offering personal loans, according to
NerdWallet. However, in the first half
of 2018, millennials opened 9.3 million
credit card accounts, versus 5.5 million
in the same period in 2013. While they
have fewer cards each than older generations, they use them just as much.
When millennials came of age, they
had either no credit file or a very thin

% of Total Distinct Count of Credit Application IDs Along LP Score Grouped
Open Lending Lenders Protection Program Score Grouped

Pricing FICO Grouped

725+

700-725 680-700 660- 680 640- 660 620-640 600- 620 580-600 560- 580 < 560

725+

82.34%

13.03%

3.67%

0.96%

700-725

30.57%

34.07%

22.15%

10.15%

3.06%

680-700

11.74%

26.52%

28.26%

21.90%

8.63%

2.94%

17.34%

21.27%

29.85%

21.08%

7.67%

2.79%

17.08%

22.68%

29.74%

20.84%

6.75%

2.91%

16.99%

23.79%

30.35%

19.64%

6.47%

2.76%

17.90%

25.57%

30.40%

18.11%

5.54%

2.48%

19.76%

26.89%

30.03%

16.71%

6.61%

21.28%

28.80%

29.63%

20.30%

11.79%

19.13%

69.08%

660- 680
640- 660
620- 640
600- 620
580- 600
560- 580
< 560

The rows represent a borrower's FICO score, while the columns represent how Open Lending's alternative data supplementation would
score those borrowers.
40

THE NAFCU JOURNAL  SEPTEMBER-OCTOBER 2019



The NAFCU Journal September-October 2019

Table of Contents for the Digital Edition of The NAFCU Journal September-October 2019

The NAFCU Journal September-October 2019
Contents
Conferences
From the Chair
Washington and Industry Briefs
The Bottom Line
Access to Money
The Best Indirect Growth Strategy
Big Moments, Bigger Wallet Share
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
Industry Perspectives
From the President’s Desk
The NAFCU Journal September-October 2019 - The NAFCU Journal September-October 2019
The NAFCU Journal September-October 2019 - Cover2
The NAFCU Journal September-October 2019 - Contents
The NAFCU Journal September-October 2019 - 2
The NAFCU Journal September-October 2019 - Conferences
The NAFCU Journal September-October 2019 - From the Chair
The NAFCU Journal September-October 2019 - 5
The NAFCU Journal September-October 2019 - Washington and Industry Briefs
The NAFCU Journal September-October 2019 - 7
The NAFCU Journal September-October 2019 - The Bottom Line
The NAFCU Journal September-October 2019 - 9
The NAFCU Journal September-October 2019 - Access to Money
The NAFCU Journal September-October 2019 - 11
The NAFCU Journal September-October 2019 - 12
The NAFCU Journal September-October 2019 - 13
The NAFCU Journal September-October 2019 - 14
The NAFCU Journal September-October 2019 - 15
The NAFCU Journal September-October 2019 - The Best Indirect Growth Strategy
The NAFCU Journal September-October 2019 - 17
The NAFCU Journal September-October 2019 - 18
The NAFCU Journal September-October 2019 - 19
The NAFCU Journal September-October 2019 - 20
The NAFCU Journal September-October 2019 - 21
The NAFCU Journal September-October 2019 - 22
The NAFCU Journal September-October 2019 - 23
The NAFCU Journal September-October 2019 - Big Moments, Bigger Wallet Share
The NAFCU Journal September-October 2019 - 25
The NAFCU Journal September-October 2019 - 26
The NAFCU Journal September-October 2019 - 27
The NAFCU Journal September-October 2019 - 28
The NAFCU Journal September-October 2019 - 29
The NAFCU Journal September-October 2019 - Executive Spotlight
The NAFCU Journal September-October 2019 - 31
The NAFCU Journal September-October 2019 - Management Insight
The NAFCU Journal September-October 2019 - 33
The NAFCU Journal September-October 2019 - Compliance Central
The NAFCU Journal September-October 2019 - 35
The NAFCU Journal September-October 2019 - Inside NAFCU Services
The NAFCU Journal September-October 2019 - 37
The NAFCU Journal September-October 2019 - 38
The NAFCU Journal September-October 2019 - 39
The NAFCU Journal September-October 2019 - Industry Perspectives
The NAFCU Journal September-October 2019 - 41
The NAFCU Journal September-October 2019 - 42
The NAFCU Journal September-October 2019 - 43
The NAFCU Journal September-October 2019 - From the President’s Desk
The NAFCU Journal September-October 2019 - Cover3
The NAFCU Journal September-October 2019 - Cover4
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