Who's Keeping Score?: Oversight of Changing Consumer Credit Infrastructure

Abstract

Access to credit in the United States is contingent upon an individual obtaining the “right” credit score. Yet the opaque scoring system makes it nearly impossible for an individual to break out of a cycle of low credit ratings and participate in the benefits of the American economy. Partially as a response, alternative credit rating products now use personal nonfinancial data for automated credit decision-making, purportedly intended to expand access to credit. Social media activity, college grades, and even what time of day a person applies for a loan are examples of data points used for this purpose. However, these and other alternative data can be highly correlated with protected traits, such as race and national origin. While extending access to credit equitably across society is an important goal, the cure should not exacerbate the same inequalities that it is designed to address. The necessity of credit for the modern consumer compels continued oversight of the credit infrastructure to ensure fair data practices and to hold participants accountable. This article contends that consumer access to a fair credit score is a necessity, and that the consumer credit infrastructure should be viewed as a modern utility and subject to additional oversight. A proposal is then advanced that establishes fair data duties for credit scoring entities.