Report

Empowering
Credit Inclusion:
A Deeper Perspective on Credit
Underserved and Unserved Consumers
Key questions Increasing access to affordable financial services and products is
we’ll answer in considered the gateway to advancing financial inclusion.1 Hence,
this study ensuring deeper and more consistent usage of credit by consumers
is a critical next step. Usage, defined as consumer activity level or
What is the size participation, is one of several indicators the World Bank calculates
of the credit to measure the success of financial inclusion efforts.2 Focusing on
underserved and usage can help determine whether credit products are having a
unserved market?
meaningful impact on consumers’ lives.
What are the key Within each credit economy, there are credit-visible and invisible consumers, as defined
characteristics of by the presence of consumer credit information. Consumers with no history of credit
credit underserved usage on their credit bureau file are the credit invisible; in our report, we define them as
credit unserved consumers. Amongst the credit-visible consumer population — those
consumers?
who do have some level of current or past borrowing activity on their credit file — there
are consumer segments with varying credit history, experience, usage and participation.
What are the
Worldwide, a growing and sizeable population of credit-visible consumers have accessed
underlying reasons traditional credit products3 but aren’t using them to the same extent as more credit-
consumers are credit active counterparts. We call this consumer population the credit underserved.
underserved and
unserved? Analyzing the underserved is a study of subtle contrasts. The underserved are credit
visible and have more credit tenure than the new-to-credit consumer who recently
opened their first-ever credit product. However, they’re not nearly as experienced or
Do underserved
active in credit participation as the rest of credit-visible consumers who have multiple
consumers migrate
credit products in their wallets. By leveraging our robust credit data, TransUnion
to becoming credit identified specific parameters that allowed us to define underserved consumers. We
served? also conducted survey-based market research to learn what underserved consumers
say is driving their credit needs and utilization.
How do newly credit
served consumers Given the availability of credit data for the underserved segment — that segment is the
perform? primary focus of this report.4 Over the next few pages, we’ll share key findings from
our study to assess their profile, performance and the migration path of those who
ultimately became more credit established consumers. Since these consumers are
How can lenders
current or past users of credit and have credit files with TransUnion, this study isn’t
effectively acquire and about whether or not they can be scored. Instead, it’s about their credit participation
manage underserved and the reasons why they’re not as active as other consumers.
consumers?
While this report will primarily focus on the underserved from the perspective of
credit data findings, we will also explore the unserved segment to the extent possible.
Because credit unserved consumers do not have any credit history, meaning no credit
accounts ever opened, they are by definition credit invisible with no credit data available
to analyze. Despite these limitations, we understand how significant credit unserved
consumers are to the future growth of the overall global economy. TransUnion believes
the compelling, qualitative insights into the factors unserved consumers cited as
reasons impacting their lack of credit participation will prove most beneficial.

Lenders can use these insights to understand how to effectively acquire and manage
both underserved and unserved consumers in order to help them achieve their financial
goals. Better serving this global community of credit consumers could unlock more
financial opportunities for both consumers and lenders.

1 Financial Inclusion Overview (worldbank.org)

2 How to Measure Financial Inclusion (worldbank.org)
3 T
 raditional credit products are credit accounts issued by lending institutions or non-traditional/online
lenders such as FinTechs. Examples of traditional products may include credit card, auto loan, unsecured
personal loan, label/store cards and student loans. See Appendix A for more details.
4 T
 he term underserved does not imply these consumers need credit or access to credit. In the context
of our report, we use this term simply to refer to individuals that have a lower level of usage compared to
1 | Empowering Credit Inclusion served consumers.
Study Methodology
Overview Our study analyzed depersonalized credit data of 572 million credit consumers in Canada,
Colombia, Hong Kong, India, South Africa and the United States. We reviewed their credit
participation, activity, originations, scores, balances and performance throughout two
cohorts: pre-pandemic and pandemic. For the pre-pandemic cohort, the study identified
consumers in March 2018, and examined their behavior and performance through March
2020, the month in which the World Health Organization declared COVID-19 a global
pandemic. The pandemic cohort began in June 2019 and was studied through the end
of June 2021. This design allowed us to analyze how consumers performed before and
after the onset of the pandemic. To better understand the voice of the consumer, we
conducted an online global survey5 of 11,128 credit consumers from a range of developed
and developing credit markets.

Key Definitions
Throughout this report, we’ll share findings for both the underserved and unserved
consumers.

We used three factors to define each of the consumer populations in our study:

1 History: The length of time on credit file (i.e., number of years since first-ever credit
product was opened)

2 Number of accounts: The number of open traditional credit accounts they

hold currently

3 Product breadth: The types of traditional credit products they hold currently or
have held in the past

Based on these factors, we established the following definitions that allowed us to size
the number of underserved and unserved consumers across the world. We’ve made
several exclusions to our definition of the underserved which are explained in detail
within Appendix A.

THE SERVED:
Credit-visible and active consumers who:
• Must have two or more years of credit history; and
- Currently have three or more credit accounts open; or
- Have had two or more different credit product types in currently or the past

THE UNDERSERVED:
Credit-visible consumers who:
• Have two or more years of credit history and at least one traditional credit account in
their credit history
• Have zero to two currently open credit accounts
• Have ever held only one type of credit product

THE UNSERVED6:
Consumers who have never had an open traditional product (i.e., are invisible on the
credit file)

5 O
 ur consumer survey was conducted from August 3, 2021 through Jan 5, 2022 by TransUnion in partnership
with third-party research provider, Qualtrics® Research-Services.
6 T
 o size the unserved, we started with the total adult population as reported by the United Nations. We then
subtracted the underserved, new to credit and served consumers. The remaining number is the unserved
2 | Empowering Credit Inclusion population size.
Who are the By the numbers
underserved We found significant percentages of unserved and underserved consumers as
and unserved? a portion of the total adult population across the world, both in countries with
more developed credit markets — Canada, Hong Kong and the United States — as
well as those with emerging credit economies — Colombia, India and South Africa.
In India and South Africa, unserved consumers accounted for more than half of
each country’s total adult population. In comparison, underserved consumers in
these regions represented 19% and 15% of the adult population, respectively. In
less populous Hong Kong, the underserved comprised 28%, representing 1.8 million
consumers (the lowest of any region we studied); still a material percentage and
potentially driven by lower need for credit beyond a single product. In contrast,
underserved consumers in the United States, one of the largest countries in our
study, comprised 14% of its adult population — totaling 37 million consumers.

The underserved, beyond the numbers

Acquiring underserved consumers and making additional products available to
them could be challenging for lenders without first knowing where and how to
identify them. Our study found underserved consumers across the world shared
several characteristics. They seem to be generally younger consumers based on
the higher percentage of Millennials in the underserved segment we observed
across regions. Card was the most commonly held product in their wallets,
especially in developed credit markets. Consumers in developing markets were
more likely to hold installment-based products. In Colombia, microcredit, a type of
small dollar loan, was the most commonly held product by underserved consumers
at 37%, while in India, agri (agricultural) loans were the most prevalent at 34% —
not surprising given the large number of consumers whose primary occupation
is farming. Nearly 60% of South African underserved consumers held clothing
accounts; a credit line issued by clothing or apparel retailers. Since the underserved
have credit history and are visible to lenders, financial institutions have a prime
opportunity to nurture the underserved population’s credit needs by cross-selling
relevant products and services, especially as these consumers progress through
their financial journeys.

Though scoring models vary across the markets we studied,7 more than 50% of
the underserved population in all countries (with the exception of Hong Kong)
fall in the below prime (higher risk) score tiers. This finding was not surprising
given consumers with minimal traditional credit experience and activity are often
considered higher risk by most conventional scoring models. Because the size of
the underserved markets is relatively large in most countries, these consumers
represent a potentially attractive growth segment for lenders looking to expand
their customer base. However, the higher-risk profile of these underserved
consumers requires greater diligence by lenders in properly balancing growth and
risk, as traditional credit scoring models have limitations in identifying potentially
good-performing, underserved consumers due to their limited credit data. To
prudently capture growth opportunities within the underserved segment, it will be
important for lenders to take advantage of advanced data — such as trended credit
and alternative data — to make informed and judicious credit offers accordingly.
Ultimately, these solutions can help lenders increase underserved consumers’
access to traditional credit products, offering them a better financial future.

3 | Empowering Credit Inclusion 7 See Appendix A for a definition of the regional risk tiers and credit scoring models.
 Canada Colombia Hong Kong India South Africa United States

Number of unserved
consumers 2.1M 16.3M 1.0M 571M 20.6M 8.1M

Percentage of country’s
adult population8 that is
unserved 7% 44% 16% 63% 51% 3%

Number of underserved
consumers 7.5M 7.1M 1.8M 170M 5.96M 37M

Percentage of country’s
adult population8 that is
underserved 24% 19% 28% 19% 15% 14%

Underserved consumers
Region10 Gen Z Millennials Gen X Baby Boomers
by generation9
Canada 17% 32% 22% 29%

Colombia 15% 34% 29% 22%

Hong Kong 8% 25% 30% 37%

India 4% 31% 39% 26%

South Africa 13% 47% 26% 14%

United States 17% 30% 24% 29%

Most commonly
held product
Canada Card 83%
Colombia Microcredit 37%
Hong Kong Card 91%
India Agricultural loan 34%
South Africa Clothing 59%
United States Card 49%

Most common
risk tier
Canada Near prime 58%
Colombia Subprime 37%
Hong Kong Super prime 53%
India Unscorable 41%
South Africa Subprime 73%
United States Subprime 39%

8 A
 dults defined as 18 years of age and older
9 T
 ransUnion defines generations based on the year that consumers were born as follows: Silent Generation,
born 1945 or earlier; Baby Boomers, born 1946–1964; Gen X, born 1965–1979; Millennials, born 1980–1994; and
Gen Z, born 1995 or later.
4 | Empowering Credit Inclusion 10 C
 onsumer profile data in this section is from 2021
Do they A not so great migration
become credit We tracked the underserved over the course of 24 months for each cohort in the study
served? to see how many migrated to becoming credit served consumers: defined as those who
opened additional credit product types (e.g., a credit card-only consumer opening an
auto loan) or added incremental accounts within their original product type category
(e.g., a credit card-only consumer opening additional credit cards). By the end of our
study, most underserved consumers did not become served. It was surprising to see
migration levels were not only so low (especially in the 2018 pre-pandemic cohort) but
also so similar across countries with different types of markets, averaging 14% across
all markets. The highest percentage of previously underserved consumers that reached
served status was in the US at 24%; the lowest was in India at 4%.

It was less surprising to see that, in our 2019 pandemic cohort, the migration
percentages remained low; dipping slightly by 2.5% globally as lenders tightened up their
underwriting standards after the onset of the pandemic. The consistency of these low
migration rates suggests the longer consumers are underserved, the more likely they
are to stay that way.

Percentage of
consumers that 14%
Canada
migrated 12%

15%
Colombia
11%

13%
Hong Kong
10%
4%
India
3%

16%
South Africa
13%

24%
United States
22%
2018 cohort 2019 cohort

Looking at credit demand as a glass half full

Despite low rates of migration, providing additional products and services to underserved
consumers, who want and need credit, presents a significant opportunity for lenders.
As we discovered in our consumer survey, which we’ll discuss in the next sections, many
underserved consumers expressed a desire for more credit but also cited specific
challenges that made them less inclined to apply for new credit or to use credit more
frequently. Understanding these challenges better positions lenders to more effectively
determine the right offers and products to meet underserved consumers’ needs.

5 | Empowering Credit Inclusion

Is it a demand We surveyed underserved and unserved consumers to understand what was driving
their lack of credit participation. We learned across most geographies, many among the
or a supply underserved and unserved are interested in obtaining credit products and understand
problem? how traditional credit systems work. They are also aware of where they stand within
most traditional risk scoring systems — and are consequently discerning about credit
products they apply for and obtain. In short, underserved and unserved consumers
know high interest rate products when they see them, generally understand the risks
of becoming over-indebted, and appear to be actively avoiding acquiring more credit
products as a result. We saw two nearly universal themes in their responses.11

Desire to avoid debt

The desire to avoid debt was the most commonly cited reason for not wanting more
credit in all regions, with the exception of Canada. At the same time, other reasons
cited by a significant number of consumers focused on inability to access credit, lack of
understanding about how credit products work, and concerns about losing control of
their finances. This indicates lenders may have an opportunity to help consumers who in
fact want credit through education about the lending process, what products they may
be eligible for, and how to build their own credit profiles.

The most common

reason consumers
Don’t want to go into debt 47%
Brazil
responded they did not
want more credit
Don’t want to go into debt 37%

Don’t need credit 50%

Canada
Don’t need more credit 46%

Don’t want to go into debt 54%

Colombia
Don’t want to go into debt 44%

Dominican
Don’t want to go into debt 53%
Republic
Don’t want to go into debt 47%

Don’t want to go into debt 53%

Philippines
Don’t want to go into debt 52%

Don’t want to go into debt 46%

United States
Don’t want to go into debt 36%
Unserved Underserved

11 T
 he majority of TransUnion’s consumer survey questions were the same or similar across regions in an effort
to ensure consistency and accuracy of our results; however, to account for regional differences, some
questions were either not asked or were modified based on their applicability to a particular region’s credit
6 | Empowering Credit Inclusion market. The tables in this section show only the regions where the exact survey question was asked.
 Cost of new credit is too high
Since many consumers want to avoid debt, the products offered didn’t resonate with
them. High interest rate products are traditionally offered to higher-risk consumers
and was the most common reason the underserved refused a credit offer. For these
consumers, education around credit products and offers may not be the reason for
their lack of participation in the credit marketplace — but rather the reason is the
structure and pricing of the products they’re offered. This implies an opportunity for
lenders to better target creditworthy underserved consumers through strategies such
as bifurcated pricing, lower interest rates or leveraging alternative or trended credit
data sources to better assess their risk.

Most common reason

a consumer did not
High interest rate 33%
Brazil
accept a credit product High interest rate 33%
offered to them
Didn’t need the
credit anymore 18%
Canada
High interest rate 19%

High interest rate 21%

Colombia
High interest rate 26%

Dominican
Didn’t need the
credit anymore 28%
Republic Didn’t need the
credit anymore 26%

High interest rate 22%

Philippines
High interest rate 36%

High interest rate 22%

United States
High interest rate 26%
Unserved Underserved

The nearly unanimous concerns underserved and unserved consumers expressed

globally about wanting to avoid debt and high interest rates suggests more work
is needed to ensure affordable credit products become more accessible to these
populations. To answer the important question and summarize what we heard, the
unserved and underserved populations are each roughly split in half: One group has
a demand problem and doesn’t feel they need additional credit; the other group has a
supply problem and cannot access the affordable credit they want. The combination of
these presents both challenges and opportunities for the lending community to address.

7 | Empowering Credit Inclusion

Consumer Understanding the profiles of underserved who migrated to becoming served
consumers by opening additional accounts and products can help lenders better target
migration ideal prospects with appropriate offers and products that meet their needs and provide
journeys: real value.
A roadmap for We termed those who migrated to the served segment by the end of the study period
lenders to serve “newly served,” while those who remained underserved are notably “still underserved.”
the underserved In general, newly served consumers were younger and appeared less risky than those
who remained still underserved.

How underserved consumers became newly served

The path newly served consumers followed provides a general framework for the types
and sequence of the credit products underserved consumers may be interested in
as they advance their credit journeys. Globally, 87% of underserved consumers who
became newly served did so by opening a second product of a different type. A majority
of these products were personal loans — as we saw in Colombia, Hong Kong, India and
South Africa.

The U.S. and Canada were the only two regions where the majority of newly served
consumers’ second product type was a card. Unlike other regions, 83% of Hong
Kong’s newly served consumers originated a third account of the same product type
they already had — primarily an additional card — as opposed to opening a different
product type. In Canada, 26% of newly served consumers opened a second product
type originated with the same lender. This finding reveals an opportunity for lenders to
activate underserved consumers who may already be in their existing portfolios and
build greater, long-term loyalty with them. However, in countries like Colombia and the
United States, where most of these new product originations (85% and 98%) were with
different lenders, lenders will need to develop compelling and competitive offers to
maintain the loyalty of their current underserved consumers.

Newly served consumers Canada Colombia Hong Kong India South Africa United States
are more likely to have
this first product type
than those who remain
underserved

No difference in Card No difference in All non-agri Retail installment, Student loan,

product holdings* product holdings* loan types retail revolving auto

* Consumers showed the same level of interest across product types

Most commonly
originated second
Canada Card 43%
product type of Colombia Personal loan 30%
consumers who
became newly served Hong Kong Personal loan 53%
by originating a second
product type India Personal loan 17%
South Africa Personal loan 51%
United States Card 40%

8 | Empowering Credit Inclusion

 Next steps of their journeys
Once consumers become newly served, what will be the next step of their journeys?
Our consumer survey revealed most underserved consumers are looking to increase
their credit use in the future — and provided some insight into why.

Future life events and better credit offers/mailers trigger credit usage
Life events and receiving better offers/mailers were the two most common reasons
underserved consumers cited for expanding their credit use, as we saw in Brazil,
Colombia, Dominican Republic and the US. Almost half of Canadian underserved
consumers responded they didn’t have a need to increase credit, while those in the
Philippines identified lower weekly or monthly payments as a key driver for expanding
their credit use.

Most common reason an

underserved consumer
Brazil Better credit offers/mailers 33%
would be likely to expand
their use of credit
Canada No need to expand credit use 46%
Colombia Future life event that would
increase my needs 39%
Dominican
Republic
Future life event that would increase my needs 45%
Philippines Lower weekly or monthly
payments 32%
United States Better credit offers/mailers 29%

Many looking to apply for new credit in 2022

The majority of underserved consumers said they were planning to apply for new credit
in 2022. Globally, almost half of the underserved consumers surveyed in Brazil, Canada,
Colombia, the Dominican Republic and Philippines reported the same.

Share of underserved
consumers who are
Brazil 39%
planning to apply for new Canada 36%
credit in the next year
Colombia 49%
Dominican
Republic 58%
Philippines 51%
United States 46%

9 | Empowering Credit Inclusion

 Most looking to increase their credit usage
In the next 3–5 years, underserved consumers in Brazil, Colombia, Dominican
Republic and Philippines anticipate their need for credit will increase. Only
consumers in Canada and US indicated they expected their needs would stay the
same over this timeframe.

Most common change

in the need for credit
Brazil Increase 58%
the underserved Canada Stay the same 59%
consumers expect in
the next 3–5 years Colombia Increase 53%
Dominican
Republic Increase 69%
Philippines Increase 52%
United States Stay the same 49%

With so many underserved consumers indicating near- and longer-term needs

for new credit, it appears lenders can expect to see many more consumers
in the market in the future. Personalized, affordable and relevant offers will
be critical to overcome the reasons these consumers have been reluctant to
obtain additional credit. Lenders will need insights into additional dimensions of
each individual consumer’s behavior over time to effectively market the right
credit products (that will provide value) to the underserved.

10 | Empowering Credit Inclusion

Newly Served Underserved consumers face the paradox of needing more credit experience to get
credit. Lenders face the conundrum of how to confidently extend credit to consumers
Exceeding who have few or no credit products in wallet, and who likely have what is traditionally
Expectations considered a risky credit score. With this in mind, we compared the credit delinquency
rates of the newly served against credit-established consumers to see how their
performance measured up. We focused on cards and unsecured personal loans because
they were the two most commonly held products across all regions in the study.

Many lenders might not expect newly served consumers to perform as well as those
with more established and extensive credit experience. However, the newly served
exceeded expectations by demonstrating overall positive payment performance. At
the product level, newly served consumers had very comparable — and sometimes
even better — vintage delinquencies on new originations compared to consumers with
established credit histories.

Newly served consumers outperformed served consumers on cards in India and the
US. Hong Kong was the only region where the performance between newly served
and served was exactly the same. In other regions, such as South Africa, where the
newly served did not outperform the served, the differences in performance could
potentially be managed through differential pricing. When it came to personal loans,
newly served consumers outperformed the served in Colombia, India and South Africa.
This performance provides additional insights to lenders that may be on the fence about
extending credit to the newly served. For lenders looking to expand their customer
base without significantly increasing portfolio risk, the newly served appear to be an
attractive, key opportunity for growth. As they’re building their financial futures, newly
served consumers appear to have generally healthy credit performance and awareness
of good debt management practices.

10.72% 10.50%

6.58%
5.52%
4.84%
4.07% 3.75 %
3.3%
2.61%
Credit card - 2.2%

2018 cohort 0.32% 0.32%

Canada Colombia Hong Kong India South Africa United States

Newly served, delinquencies 30 days or more past due 12 Served, delinquencies 30 days or more past due 12

21.82%
19.34%

10.8%
9.92%
8.39%

4.92% 5.64
%
5.18%
Personal loan - 4.25% 4.27%
3.0% 3.1 %

2018 cohort
Canada Colombia Hong Kong India South Africa United States

Newly served, delinquencies 30 days or more past due 12 Served, delinquencies 30 days or more past due 12

11 | Empowering Credit Inclusion 12 A

 ny delinquencies (30 days or more past due) occurring within the six-month period
Lender The underserved are a unique segment of credit-visible consumers; they are in many
ways less understood or targeted than unserved consumers – those who’ve never
Takeaways held any credit products. While many banks and lenders have programs specifically
aimed at unserved consumers, few have developed specific strategies focused on
the underserved. TransUnion was able to define and address key business questions
regarding the underserved by leveraging our robust credit data, with the goal of
empowering greater credit inclusion.

While underserved consumers have expressed and demonstrated their desire and
intent to grow their credit use in the future, concerns about high costs have made them
hesitant to increase engagement with traditional credit products. Most underserved
consumers have what many lenders typically consider higher-risk credit scores.
However, our study revealed that the newly served — previously underserved consumers
who become served — were lower risk, improved their credit scores and became more
credit active than those who remained underserved. Since most underserved who
became newly served did so by opening up a new account of a different product type,
lenders can use these products, commonly loans and cards, as entry points to reach
underserved consumers. Given the size, growth and performance demonstrated by
the underserved, lenders have a prime opportunity to expand their universe by serving
Summary of creditworthy, underserved consumers.
key findings
Determining an effective strategy to confidently lend to unserved consumers can
present a significant challenge for lenders, given the lack of credit information for
The pandemic
the unserved segment. Many lenders rely on traditional credit risk scoring models,
appears to have had
which are generally not able to generate a score for currently unserved consumers.
a negative impact
The availability of alternative consumer data sources, such as rental payments, short-
on the number of term loans, telecommunications and utility payments, checking and savings accounts,
consumers who and other potential indicators of creditworthiness, vary globally. However, leveraging
migrated from alternative data sources that reflect behavior and activity on non-credit accounts can
underserved to enhance a lender’s visibility into unserved consumers and provide a basis to assess
served across their creditworthiness. As an example, TransUnion’s analysis in the US found that, with
all regions. the inclusion of rental payment tradelines in the credit file, approximately 9% of those
consumers who were previously unscorable under traditional risk scores became
Originating a card scoreable, with an average credit score of 631 — placing them in the near prime score
band (VantageScore® 3.0 range of 601-644).13 A separate analysis in Latin America,
or personal loan is
specifically Colombia, found alternative credit data could help raise the country’s
the most common
financial inclusion to 97%14 — well above the national government’s goal of 85%.15 By
way underserved
leveraging a combination of trended credit and alternative data solutions, which reveal
consumers deeper insights into consumer credit capacity and payment performance, lenders
migrated to being can better understand which consumers meet their target risk parameters and more
credit served. confidently extend credit— opening the door for greater access to financial products
than would otherwise be unavailable.
Newly served
Better serving the underserved and unserved starts with seeing them — not just as
consumers have
scores or even as consumers, but first as people with needs, concerns and aspirations.
comparable, and
Most underserved and unserved consumers said their need for credit is triggered by
sometimes better,
life events, suggesting that they see credit as a means to improve their lives. Better
vintage delinquencies understanding their needs and potential future journey can inform lending strategies
on new originations that meet them where they are today and help guide them to where they want to be
compared to served financially in the future. Facilitating financial literacy and ongoing engagement can
consumers with empower and support the underserved and unserved, enabling them to become
more established consumers who can utilize credit access to start families, buy homes and launch
credit histories. businesses, thereby strengthening the economies in the communities where they live.
13 A
 lternative Data Such as Rent Payment Reporting Bridges the Gap for Unscorable
Consumers and Increases Financial Inclusion Opportunities (transunion.com)
14 T
 ransUnion internal analysis
12 | Empowering Credit Inclusion 15 C olombian Government National Development Plan
Appendix A: Definitions and Exclusions

Consumer Exclusions — The Underserved Regional Credit Score Models and Risk Tiers
The following consumers were excluded from our definition of
the underserved based on the on the three defining factors RISK SCORE MODEL AND TIER CUTOFFS
listed below. This narrowed focus allowed us to thoroughly
analyze the unique credit profiles and behaviors of underserved Canada
consumers. Canadian CreditVision® Risk Score
Subprime = 300–639
Near prime = 640–719
Basis of Exclusion by Defining Factor Prime = 720–759
Prime plus = 760–799
History
Super prime = 800+
Our study has excluded new-to-credit consumers; defined as
those who opened their first-ever credit product within the prior Colombia
two years. These consumers may seem underserved by definition Colombian CreditVision® Risk Score
but are at a very different place in their credit journey than the Subprime = 0–520
target population we wanted to study. Many lenders have specific Near prime = 521–630
new-to-credit consumer strategies in place that treat these Prime = 631–740
consumers differently, and we wanted to remove those impacts. Prime plus = 741–780
Super prime = 781+
Number of accounts
Hong Kong
• If
 they have three or more open accounts, we consider them Hong Kong CreditVision® Risk Score
to be a credit-active consumer. Subprime = JJ to II;
• I f they have no currently open accounts but closed accounts Near prime = HH to DD
in the past, we’ve defined them as underserved and not Prime = CC
unserved. Prime plus = BB
Super prime = AA
Age and product holdings
India
• S
 ilent Generation; born 1945 or earlier — These consumers
Indian CreditVision® Risk Score
tend to have lower credit activity as their credit journey Subprime = 300–680
winds down. Near prime = 681–730
• C
 onsumers with only a mortgage — Mortgage is typically Prime = 731–770
difficult to acquire with no other credit history, and these Prime plus = 771–790
consumers with just a mortgage are considered outliers. Super prime = 791–900
They’re potentially very wealthy and not representative of the
underserved population we wanted to study. South Africa
South Africa CreditVision™ Risk Score
• C
 onsumers with only an auto loan — This is a Hong Kong-
Subprime = 0-625
specific exclusion as auto loans in Hong Kong are typically for Near prime = 626–655
luxury vehicles of very wealthy consumers, and therefore, also Prime = 656-695
considered an outlier. Prime plus = 696–720
Super prime = 721–999
Product Exclusions —Traditional Credit
United States
The following products were excluded from our definition of
VantageScore® 4.0
traditional consumer credit products:
Subprime = 300-600
• R
 ent, telco or utility payments Near prime = 601-660
Prime = 661-720
• S
 hort-term, high-interest (payday) loans and buy now pay later
Prime plus = 721-780
loans — as these are often not reported to the credit bureaus
Super prime = 781+
• C
 ommercial loans

13 | Empowering Credit Inclusion

 For more information or to further discuss this study, contact your
TransUnion representative or email tu_info@transunion.com.

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