Big Issue Invest runs an Alternative Credit Scoring Initiative that will add alternative data, such as rent payments, to traditional credit scoring models.

This is a transformational initiative which may bring as many as 1.5 million low-income people into the mainstream credit market.

Millions of people, mainly on low incomes and living in rented accommodation, are declined affordable credit each year. They end up turning to high cost lenders, such that the poorest people end up paying the most for credit.

Many of these people are reliable payers of rent and bills, yet such payment information is not recorded with the credit reference agencies nor used in credit decisions. There is too little information in mainstream credit decision making models to assess their true credit risk.

We are currently undertaking a proof of concept to test out the predictive and market value of rent payment data in credit scoring.

We are downloading rent account data from partner social housing landlords who together have over 500,000 tenants. We are working with leading credit scoring specialists to test out the predictive value of rent payment data in credit scoring as well as the National Housing Federation and a number of the largest social landlords in the country.

We are talking with high street banks and other mainstream lenders on use of the data to increase their ability to adequately assess the credit risk and borrowing capacity of the so-called 'thin file/no file' population. This should help them to lend responsibly to low-income consumers and tenants who are currently financially excluded.