For generations, the credit ecosystem has operated consistently and reliably. Yet many of the general principles of credit scoring have edged out marginalized and lower-income consumers. As a result, those consumers had trouble getting loans or credit cards, let alone leveraging debt to get ahead.

As an example, consider the basic concept of building credit. Itโ€™s fine for those who start with credit. But people without a credit score canโ€™t get credit, which becomes a vicious cycle. Essentially, theyโ€™re considered โ€œcredit invisibleโ€โ€”and therefore left out. To make matters worse, moving out of credit invisibility can be difficult or nearly impossible. Even consumers who have paid their bills on time usually canโ€™t get approved for credit without a cosigner. And cosigners arenโ€™t always readily available.

Whatโ€™s the answer to this problem? Experian believes the solution lies in a seismic disruption of its industry. As one of the three main credit bureaus, Experian has led the charge to revitalize the credit ecosystem. As such, Experianโ€™s team members have instituted and implemented key credit changes to help historically excluded consumers.

Experianโ€™s movement toward wider inclusion of marginalized consumers into the credit world couldnโ€™t have come at a better time. Today, society is demanding that business-led social responsibility be more than platitudes or donations. Instead, people want to see corporations like Experian taking innovative strides to level the playing field for marginalized consumers.

Just what is Experian doing thatโ€™s so unique in the industry? The answer comes in the form of their Experian Boostโ„ข and rent reporting initiatives.

Experian Boost: Giving Consumers Credit for On-Time Bill Paying

The Experian Boost program has been around for a few years. During that time, itโ€™s helped six million people begin to solidify and improve their credit scores. Experian Boost has received widespread accolades from both consumers and business leaders like Dara Duguay.

As the executive director of Credit Builders Alliance (CBA), Duguay believes that Experian Boost opens up important credit avenues. She points out that programs like Experian Boost โ€œcan help drive financial inclusion and create opportunity for millions of underserved consumers.โ€

Experian Boost works by allowing consumers to link their tradeline data to their Experian credit file. In practice, this could mean connecting an Internet provider account with the Experian account. Every time the consumer paid the Internet provider on time, the positive payment information would be reported to Experian.

On average, Experian Boost can add up to 13 points to a consumerโ€™s FICOยฎ Score 8. For a customer trying to move out of subprime credit, those points could make a huge difference. They could also help establish a record of dependable, on-time payments, which lenders appreciate.

Experian Rent Reporting: Rewarding Reliable Renters

Compared to homeowners, renters are seven times more apt to struggle with credit invisibility. Why? The rental housing system doesnโ€™t include any kind of reward for making monthly payments. In other words, trustworthy renters get no credit towards their credit reports for being diligent.

This makes it difficult for renters to gain any kind of financial advantage. And since Black and Hispanic households rent at two times the rate of white households, the issue becomes one of racial inequality.

To combat this challenge, Experian has helped the CBA create a Rent Reporting Technical Assistance Center (RRTAC). The purpose of the RRTAC is to reduce barriers for housing providers to report their tenantsโ€™ rental payments to credit bureaus. That way, renters can begin to receive recognition for making rent a priority.

Though rent reporting initiatives are still in their earliest stages, theyโ€™ve shown impressive progress. Take a CBA pilot program from several years ago, for instance. All participants of the rental reporting pilot who began as credit invisible saw an uptick in their credit. In fact, 100% of them ended up at or near prime scores. Those who started the pilot at subprime credit levels enjoyed an average improvement of 32 points. Plus, landlords and property managers enjoyed engaging in the program because it incentivized renters to stay on top of bills.

Experimentation and Influence: Experianโ€™s Calling Cards

In time, Experian hopes to help the credit ecosystem open up in terms of accessibility. With programs like Experian Boost and rent reporting, credit invisibleโ€”and those nearly soโ€”can boost their credit profiles. This tears down obstacles to their getting loans, receiving credit cards, and being able to use debt wisely. Perhaps best of all, it opens the door to more financial opportunity for all fiscally responsible consumers, no matter what their backgrounds.