Millions of Americans remain credit invisible or underbanked in 2025. It’s not because they’re high-risk, but because legacy systems weren’t designed with Americans’ modern financial lives in mind.
You likely feel this tension: wanting to expand access while still protecting your credit union’s financial health. It doesn’t have to be a choice between mission and margin. With the right technology and data, lending to the underserved is possible. And it’s a strategic growth opportunity for credit unions.
The underserved market is large and growing
According to the Consumer Financial Protection Bureau, approximately 63 million Americans either lack a credit history entirely or don’t have enough data to generate a reliable credit score. That’s nearly one in five adults! Many are renters, gig workers, immigrants or Gen Zs just getting started in life.
Traditional credit models weren’t built to assess these members. As a result, many are denied access to basic financial products or are charged significantly more for them. It’s a matter of financial equity, of course, and it’s a missed opportunity to increase your income while fulfilling your mission.
Alternative data unlocks smarter, fairer lending
Modern risk tools allow credit unions to dig beyond the FICO score to gain a more complete picture of member creditworthiness. Alternative data, like rent reporting, utility payments and transactional data, can offer meaningful insight into a member’s ability and willingness to repay.
These are particularly helpful to add into the mix for Gen Zs who aren’t buying houses yet but regularly pay their rent on time. Young people are among the underserved, not because of their poor history with credit—only that they have little to no credit history. Gen Z’s average credit score is creeping up slowly, hitting 680 in 2023, and remains far below all consumers’ average of 715, according to Experian.
With lower or less visible scores, lenders tend to charge a higher rate, making it profitable for those who use alternative data correctly. Those firms that focused on financial inclusion can earn more, and those focused on consumer credit see even more significant growth. A 2023 LexisNexis Risk Solutions study read:
Use of alternative data has positively impacted revenue growth for nearly all FIs surveyed, with the majority saying revenue has increased by at least 15%. Firms focused on financial inclusion report even greater revenue increases, with nearly one-third indicating a 25% or higher increase. Firms focused on consumer credit have also seen significant revenue growth, with 33% of respondents indicating a 25% or higher increase.
That means more members served, more loans originated and healthier and more inclusive lending.
Tech makes inclusion scalable
Historically, lending to underserved segments was viewed as labor-intensive. Manual underwriting, additional human outreach and unclear risk signals made it hard to scale. That’s changed.
Fintechs can help credit unions automate and scale work with Gen Zs and other underserved markets with tools such as:
- predictive analytics that identify repayment capacity using real-time data;
- real-time risk monitoring that flags potential issues before delinquencies occur; and
- member segmentation that enables tailored loan terms and interventions based on behavior.
This approach accelerates the lending process, strengthens member bonds and allows your team to focus on higher-value work, like financial coaching or early interventions when a member needs support.
Doing good and doing well
Financial inclusion isn’t a marketing slogan for credit unions. It’s a smart business strategy.
As competition in traditional lending segments intensifies, underserved markets offer new avenues for growth. These members are often intensely loyal when treated with respect and transparency. They’ll remember who helped them when your competitors said no.
The combination of scalable tools and more profound community impact generates long-term value for your credit union and the members and communities you serve.
Credit unions are uniquely positioned to lead
No one is better positioned than credit unions to meet this moment, especially as the economy seems to be heading toward a downturn. You already have the trust, mission, and local knowledge; just add the data.
Inclusion is the next competitive edge
The future of credit isn’t about scoring. It is about seeing your members who have thin or no credit files, including Gen Zs, more clearly. Other borrowers might have experienced a major life event that damaged their credit, and you can serve them, too.
By embracing predictive analytics and alternative data, credit unions can reach those previously left behind—growing membership, improving financial outcomes, and strengthening community resilience.
If you’re ready to expand access while protecting your portfolio, let’s talk.
At Salus, we provide the infrastructure to make inclusive lending scalable, sustainable, and secure. Whether you’re expanding microloan programs, exploring alternative underwriting, or rethinking portfolio risk, we’re here to help you lead with both vision and confidence.
