Payday Lenders Develop Alternative CreditBureau

Register now

CHICAGO - (06/07/05) -- The nation's payday lenders, seekingto establish greater respectability, are setting up their ownalternative credit bureau that will allow consumers withnon-existent credit scores the chance to create credit historiesbased on payment records for commonly recurring bills, such asrent, private mortgages, utilities, telephone, cable TV, child careand payday advances. Because such payments are not generallytracked by the three major credit bureaus, as many as 50 millionconsumers without established credit histories are often precludedfrom obtaining affordable home loans, auto loans and insurance.This condition also makes obtaining jobs, utility hook-ups andtelephone service costly and difficult. The new system is beingpiloted by the Community Financial Services Association of America,a trade group representing 164 payday lenders, and PRBC, analternative credit bureau supported by a grant from the FordFoundation.

For reprint and licensing requests for this article, click here.