Gary Drenik is a seasoned writer for Forbes, focusing on innovation in both large enterprises and small businesses through AI applications for consumer data. Since 2012, he has provided insights into innovative privacy-compliant predictive analytics and targeted marketing solutions.
Recent economic and regulatory changes and shifts in consumer behavior have significantly reduced lenders’ visibility of consumer credit quality. Risk managers now seek better ways to assess this risk and a growing number of data solutions can assist them. Practitioners should know that relying only on traditional credit data gives a narrow view of consumers' credit health and limits informed decision-making.
Credit stress is growing in unprecedented ways as economic changes occur faster and on a larger scale than expected. According to, bankruptcy filings have strayed from their usual seasonal trends for the first time in a decade. In April 2024, filings reached their highest level since March 2020 and this trend continued through July. Additionally, many consumers are entering third-party collections for the first time, despite having no prior delinquencies on their credit reports.
“Consumers are now relying more on alternative financial products to manage short-term financial needs instead of traditional non-prime lending. This shift is evident in the decreased velocity of short-term loans issued by lenders and the decline in short-term loan applications per person,” King said.
Changes in how medical debt and payment data are reported have transformed the credit reporting landscape. From 2018 to 2022,indicated that an estimated 22.8 million people would have at least one medical collection removed from their credit reports and collections under $500 would no longer appear. Since 2020,issuers have stopped sharing payment data with credit bureaus.
Post-Pandemic Consumer Machine Learning Alternative Data Credit Data Decision-Making Practioners Risk Management Loans
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