Big Issue Invest is developing an Alternative Credit Scoring Initiative and we are undertaking a proof of concept 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 2 million low-income people into the mainstream credit market.

Millions of people are declined affordable credit each year. Such people are often on low incomes and living in rented accommodation. They end up turning to high cost lenders, such that the poorest people end up paying the most for credit. This is turn can exacerbate problems of over-indebtedness.

All these people are not necessarily un - creditworthy, rather there is too little information in mainstream credit decision making models to assess their true credit risk. 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.

Our proof of concept is testing out the predictive and market value of alternative data in credit scoring.

We are now 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.

And we are in discussion with high street banks and other mainstream lenders about the index 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 lower risk groups of tenants who are currently financially excluded.

If would like to know more about this initiative, please contact Sarah Forster at sarah@biginvest.co.uk.