Experian’s Clarity Services Releases 2020 Alternative Financial Services Lending Trends Report

Apr 20, 2020Financial Literacy, News

Experian’s Clarity Services Inc., which specializes in alternative financial services data and solutions, recently released its 2020 Alternative Financial Services Lending Trends Report. The report’s findings are based on an analysis of more than 500 million consumer loan applications and roughly 30 million loans from the agency’s alternative credit database.

“Clarity’s data provides a broader, deeper view of non-prime applicants so lenders can make better and more informed decisions during the entire consumer life cycle ⎯ from prospering to underwriting and account management to collections,” the report reads.

Among the report’s key findings are that the online small-dollar installment market has continued to grow, with larger loan amounts driving an increase in funded dollar volume. It also found that in 2019, the industry continued to trend toward longer repayment terms and larger online installment loan amounts.

In addition, a higher percentage of online installment credit applications from alternative financial services (AFS) came from consumers with higher traditional credit scores. Though online installment loan performance declined in 2018, it returned to normal last year.

Lastly, Texas, Florida, and California have persisted as the largest online small-dollar lending markets, mainly due to their larger populations. Most other states have seen their markets stay consistent over the last five years. Michigan, however, rose nine spots during the same period.

When next year’s report is released, it will contain important information and unique insights, given the COVID-19 pandemic currently taking place in the United States and around the world. Using this year’s report as a baseline, we will be able to look back and see exactly how the major disruption has impacted the alternative financial services industry and the consumers who access its services.

The full report is available and can be accessed by clicking here.

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