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Premium: “Our work on thin files is far from complete”

Credit Awareness Week is the perfect time to gauge progress against financial exclusion, says Experian chief data officer Jonathan Westley.

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How do you measure the progress being made in tackling financial inclusion? At Experian, 16 months ago, we decided to put a number on it: 5.8 million.


That was the amount of people, our analysis showed, who were virtually invisible to the financial system because there was insufficient information on their credit file. People in this group are often referred to as ‘no file’ when they aren’t on bureau records at all, or ‘thin file’ when there is some data yet not enough relevant information for organisations to make an informed decision.


Consequently, they struggle to access the mainstream financial services many of us take for granted, or when they do, they are forced to pay a higher rate. People might be ‘credit invisibles’ because they have just turned 18 and are new to credit or have recently moved to the UK.


Alternatively, perhaps they conduct most of their transactions in cash, or simply haven’t used credit for a long time. As our support for Credit Awareness Week moves into its fourth year, we decided to check our progress. The good news is that we have managed to reduce the invisibles population by almost 420,000 in the last 12 months, to just under 5.4 million.


Of this number, an estimated 1.5 million have no credit files. A further 3.9 million have thin files, where there is some information but not enough to make a decision – it’s here where we have made inroads. We have managed this through introducing new data sources to the bureau.


For example, a large telecoms provider is now contributing data to Experian, while we have been working with fintechs such as Monzo to add their data. We’re also taking steps to allow consumers to contribute their own data to the bureau.


At the same time, our data office has been working closely with our existing data suppliers to help them improve the quality of data they contribute, so more people are matched to data and it appears on their credit files. It’s clear to us the industry is taking data quality more seriously than ever before. Yet there is much more which needs to be done.


Our analysis shows Edinburgh is the thin-file capital of the UK. It’s home to the three parliamentary constituencies which have the higher proportion of people with thin files. Edinburgh North and Leith has the greatest amount at 14.9 percent, followed by Edinburgh South (14.8 percent) and Edinburgh East (14.5 percent).


At the other end of the scale, Basildon and Billericay’s thin file population of 4.2 percent is the lowest of all UK constituencies. Credit Awareness Week 2020 offers us all the chance to take a moment to reflect on the hard work that so many of us have put in to reduce financial exclusion.


Thanks to this effort, more people can access the mainstream services they need, and many are paying less than they otherwise would have.


However, it should also be the moment we acknowledge the job is far from complete. I would encourage you to take this opportunity to consider what new data your organisation can contribute, or how you can improve quality of data you already share. Together we can continue our mission to bring more people into the mainstream financial system and combat exclusion.

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