One of the first and most important things that a lender does is check your credit score. If you don’t have any credit at all or you have a thin credit file, this can serve as a roadblock to your borrowing. This article will help you in Understanding Clarity Services by Experian.

Clarity Services by Experian can help ease the way to access to alternative financing for those whose credit experience is somewhat limited.

What is Clarity Services by Experian?

Experian Clarity Services is the alternative credit reporting service that is meant to help people who have limited history of credit. This is the biggest credit bureau under the regulation of Fair Credit Reporting Act that focuses on the subprime sector.

The focus of Clarity is data reporting for subprime, near-prime, and underbanked consumers due to their minimal recorded data, with lending institutions finding it a challenge to assess their creditworthiness.

Using nontraditional data for credit reporting is a rather new idea that now steadily moves to the mainstream. There is now an increased awareness of how valuable alternative data can be for consumers, credit building services, lenders, and credit reporting agencies alike. The alternative data is proven to be an effective means of building or restoring a good credit history.

This is important for those who wish to try the traditional options for borrowing but found out that the door was closed for them. Clarity Services by Experian has the goal of helping lenders get a good understanding of these consumers and provide suitable solutions for financing.

How Clarity Services by Experian Creates Credit Reports?

The traditional credit reporting is all about consumer debts like car loans, student loans, or credit cards. Clarity Services provides real-time reporting of credit based on the available information, if there is any, but this also widens its scope to cover other financial accounts.

Among the alternative data services where Clarity gets information from are the following:

• Auto loan financiers
• Prepaid card issuers
• Check cashing services
• Peer to peer lenders
• Short term installment lenders
• Cellphone providers
• Small-dollar credit lenders

Just like how data is gathered for the core credit bureau information of Experian, financial institutions report inquiries on loans and payment information to Clarity.

Lenders can use this information in the Clarity credit report of a consumer to come up with approval decisions once someone applies for a line of credit or a loan. This can significantly streamline the process of credit reporting for people with scant history of credit.

Back in the days, it was hard to incorporate telecom, rent, and utility history so paper-based and manual processes were heavily relied on. With the rise of new technologies these days, there are no longer tech-driven and automated solutions that offer consumer-allowed access to the information directly from phone communication providers, utilities, and landlords.

However,  Clarity is not only for lender since consumers can also access their credit scores and files through the official website. You don’t have to pay anything when requesting for your Clarity credit score or report and no need to sign up for ongoing services.