| Entities | |
| Topics and Issues | Analytics (2) Credit scores (37) Credit-based Insurance Scores (CBIS) (24) Financial inclusion (22) |
The U.S. Chamber of Commerce issued a new report, The Economic Benefits of Risk-Based Pricing for Historically Underserved Consumers in the United States. This report, from the Chamber’s Center for Capital Market Competitiveness (CCMC), evaluates how risk-based pricing and the use of data results in better outcomes for consumers by increasing access to financial services products and enabling the pricing of these products to accurately and appropriately calibrate for borrower or repayment risk. The report also accompanied a press release, Supporting and Strengthening Risk-Based Pricing to Benefit All U.S. Consumers, and a two-page summary.
The report made several key findings in showing that the benefits of risk-based pricing are far-reaching and has allowed lenders and insurers to better serve consumers across the risk spectrum: Consumers are better off in the risk-based pricing system than in a uniform pricing system; Credit scores, credit-based insurance scores, and other risk-based pricing factors are proven to accurately predict risk unbiasedly; Minority and low-income households have realized the greatest improvements in assets and access to capital; Companies are innovating and using alternative data to reduce the credit-invisible population and improve credit scores for those who currently have them; and Incorporating more predictive data, not less, into risk-based pricing models generates positive economic benefits.
This new report follows some work that the U.S. Chamber did in 2014, 4 Ways Credit Scores and Risk-Based Pricing Benefit Consumers.