Credit scores

The use of rent data in credit models is allowing people with low credit scores or thin credit files to get loans. But consumer advocates warn the use of that data could harm the very people it’s supposed to help. 

The data from these transactions could help millions of borrowers with thin or nonexistent credit files. But how the credit reporting industry collects and treats the data may matter more than the data itself.

Americans with student loans are about to get a stark wake-up call on their borrowings as government relief programs phase out, according to a blog post by the Federal Reserve Bank of St. Louis.

Esusu, a financial technology company that aims to help bridge the racial wealth gap by reporting rent payments to credit agencies, has become one of only a few Black-owned startups to reach a valuation of $1 billion after closing a Series B round led by SoftBank Vision Fund 2.

The startup PointCard's new charge card ignores applicants' credit scores, instead weighing their cryptocurrency holdings and other investments to determine ability to repay.

The COVID-19 pandemic has exacerbated income inequality in America, and that has implications for banks and other lenders. Among those suffering most: renters, front-line workers and minority small-business owners.

The bank's earlier decision to stop accepting applications for the consumer loan product had sparked a backlash among customers and lawmakers.

Tens of millions of consumers diligently pay their rent, utilities and other bills every month yet have no credit history. Supplementing traditional credit scoring with such data will promote equity and upward economic mobility, says the CEO of Experian North America.

Kikoff, whose investors include Golden State Warriors' star Stephen Curry, provides applicants with a no-fee $500 revolving line of credit they can use to purchase personal finance books and courses from its online store. The company then reports this payment activity to some credit bureaus.

The new feature allows users to add thin-file spouses and teens on one account.

The new feature allows users to add thin-file spouses and teens on one account.

Variables unique to the past year, such as the effect of government stimulus, are not fully considered in typical credit scores. For a more complete picture, the industry should accelerate a digital transformation in scoring models.

Without the application of tested safeguards, using such data can run the risk of worsening the very problems of credit access that we seek to solve.

Demand for buy now, pay later (BNPL) services in the U.S. is surging as cash-strapped consumers welcome the opportunity to get instant loans minus any official credit inquiry.

The Federal Housing Administration said in its annual actuarial report that the capital reserve ratio on its mutual mortgage insurance fund increased to 6.10% in fiscal year 2020, up from 4.84% a year earlier.

The company, which provides credit cards to millennials, is expanding its target audience beyond thin-file consumers and those without credit histories. It will now also target those with blemished, nonprime credit histories.

Millennial credit card provider Petal is expanding its target audience beyond thin-file consumers and those without credit histories. It will now also target those with blemished, non-prime credit histories.

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Harvest, a fintech founded by Nami Baral, has developed an alternative scoring method that amasses data on spending patterns, debt payments and even earnings potential to get a better sense of consumers' creditworthiness.

Credit unions need to improve their processes to ensure the problems that have arisen with credit reporting during the coronavirus don't happen again.