Related article:Mounting Evidence Shows Underbanked are Favorable Risks for Banks
According to LexisNexis, consumers with no credit files actually can prove to be good risks compared to consumers with full credit files when factors other than credit scores are examined. Perhaps most telling for banks are LexisNexis' findings regarding bankruptcy filings. While 8 percent of full-file consumers filed for bankruptcy, just 1 percent of no-file consumers declared bankruptcy. "People might say this is because the no-file people just don't have a credit record, but this is still a significant finding," asserts Tom Brown, VP, market planning, financial services, with LexisNexis.
Percent of population that declared bankruptcy:
Full-file population 8%
No-file population 1%
Percentage of population with liens:
Full-file population 13%
No-file population 6%