By Max Axler

Economists call nearly 50 million Americans, more than 10 percent of our population, the “credit invisibles.” They are unseen by our financial system because they lack a usable credit score, limiting their access to loans, credit cards or homeownership. Unfortunately, they cannot fully participate in our economy.

Those who are credit invisible are missing opportunities to build a stable financial future and achieve financial freedom, often through no fault of their own. They include Gen Z and young millennials, many of whom grew up in low-income households with limited access to credit. Despite these challenges, many have a long history of consistently paying their rent or utilities bills, factors that are generally not considered in a traditional credit report.

Credit cards are the primary way credit invisible consumers can enter the financial ecosystem and build their financial lives. Expanding access to credit will create a more inclusive economy and drive economic growth.

One little-known initiative that is attempting to find solutions to increasing fair access to economically disadvantaged populations is called Project REACh, or Roundtable for Economic Access and Change. The initiative is a novel and innovative collaboration model that is making progress in tackling this important issue. Project REACh, a financial inclusion initiative launched by the Office of the Comptroller of the Currency (OCC) under the U.S. Treasury Department, brings together dozens of financial service companies, civil rights organizations, consumer groups, and community developers. These stakeholders work to identify consumer needs and offer credit invisible Americans a pathway to build a credit profile and to date, financial institutions have made over 100,000 loans to this population.

Synchrony is proud to be part of this important initiative. In my role as Chief Credit Officer of Synchrony, I have seen firsthand how our work in this initiative is changing lives for the better. Together with other Project REACh participants, we have been providing resources and expertise to qualify credit-challenged Americans for their first credit accounts since 2022. Since then, we have gained insights into credit usage and the most effective ways to improve financial inclusion on credit invisibles.

Here are three takeaways based on my experience with Project REACh:

Unlocking Creditworthiness with Data Science: By leveraging more and better data, we can improve our assessment of someone’s creditworthiness. Factors beyond a credit score, such as stability in the balance of checking and savings accounts, can demonstrate someone’s ability to pay a loan back and add context to customer behavior, resulting in better loan decisions.

Empowering Credit-Challenged Americans with Diverse Financial Solutions: Inspired by Project REACh, banks have originated more than 100,000 new consumer accounts since the program inception. Institutions are offering a variety of financial products that are allowing credit invisibles their first ever extension of credit in the United States. As we hoped, many of these “credit invisibles” responsibly pay back their loans, with a majority of these consumers ascending to a prime credit score after a year.

Through this program, Synchrony is using bank and deposit account data combined with our advanced underwriting techniques to approve tens of thousands of people for their first credit card, helping to improve financial inclusion for traditionally underserved populations.

Providing Convenience Matters: Providing financing products in places where credit challenged Americans already shop is crucial to help solving the issue. Financial inclusion starts with meeting people where they are already shopping. This program has helped parents, for example, who previously had no credit finance their back-to-school shopping.

There is no question that responsibly expanding access to credit strengthens both the economy and the middle class. The fact is many people who have historically been locked out of our financial ecosystem are creditworthy and we have the means to help them. Project REACh offers a public-private collaboration model that works and should be replicated. It is giving more people the chance to build a healthy financial future.

Max Axler is Executive Vice President and Chief Credit Officer of Synchrony, a leading Fortune 200 consumer financial services company.