Payday Lenders Seek Respect

The nation's payday lenders, seeking to establish greater respectability, are setting up their own alternative credit bureau that will allow consumers with non-existent credit scores the chance to create credit histories based on payment records for commonly recurring bills, such as rent, private mortgages, utilities, telephone, cable TV, child care and payday advances. Because such payments are not generally tracked by the three major credit bureaus, as many as 50 million consumers without established credit histories are often precluded from obtaining affordable home loans, auto loans and insurance. This condition also makes obtaining jobs, utility hook-ups and telephone service costly and difficult. The new system is being piloted by the Community Financial Services Association of America, a trade group representing 164 payday lenders, and PRBC, an alternative credit bureau supported by a grant from the Ford Foundation.