The data: Six in 10 US consumers ages 25 to 44 said a checking account that reports rent and bill payments would be more valuable than their current checking account, per a recent Cornerstone Advisors study commissioned by Bloom Credit.

Digging into the data:

• About one in four US adults—including about one in three Gen Zers—have a subprime credit score) per Experian data cited in the study.
• Nearly half of Gen Zers (46%) and millennials (48%) use credit-building tools, although about two-thirds of Gen Zers (63%) and millennials (69%) said these tools had a limited-at-best impact on their credit scores.
• Gen Zers and millennials find credit-building features an enticing part of a checking account offering: 79% of millennials and Gen Zers would use a nonprimary checking account more frequently if those payments were reported to credit bureaus.

Trendspotting: Alternative credit scoring is already embedded in some checking accounts: Block announced in November that it would pilot a proprietary, real-time credit-scoring model based on consumers' financial behaviors within Cash App, including deposit frequency, spending and saving activity, and loan repayments.

Credit scoring is also changing in ways that are not proprietary to a financial provider. For example, in November FICO announced a partnership with Plaid to incorporate cash flow data from checking, savings, and money market accounts into one of its scores. The credit bureau’s VantageScore now incorporates alternative credit data to bulk up thin credit files.

Our take: Alternative credit reporting takes a commitment from a critical mass of financial institutions (FIs).

For example, debit card expenditures, direct withdrawals from checking accounts, and direct deposits are a crucial gap in aggregate data on consumers’ creditworthiness. At this stage, FIs’ participation in reporting alternative credit data can also be sold to prospective customers, especially Gen Zers and millennials, as a differentiator.