ICYMI: Scott Continues to Level the Playing Field for Creditworthy Americans
Washington, D.C. – In keeping with his successful efforts to help creditworthy Americans climb the economic ladder, U.S. Senator Tim Scott (R-SC) recently introduced bipartisan legislation that would allow landlords and utility and telecom providers to report on-time payments data to credit reporting agencies. The Credit Access and Inclusion Act of 2018 would help millions of Americans who currently lack the payments history needed to take out a mortgage or finance a higher education to develop a positive credit history by allowing the credit bureaus to consider non-traditional lines of credit.
“If someone works hard day in and day out, pays their bills on time, and has demonstrated they are financially stable, that should be reflected in their credit score,” said Scott. “Many of the folks who are negatively impacted by the narrow scope of the data used in credit scoring are also among the 50 million Americans who live in distressed communities across the country. We can help close this gap by recognizing the individuals who deserve access to credit and have proven beyond a doubt that they are ready for this responsibility.”
Current credit score models only consider traditional lines of credit, which exclude records of rent or utility payments. This limited approach has resulted in 26 million Americans who are considered “credit invisible” despite their established history of paying these bills on time. For example, studies show that 17% of South Carolina adults could be scored by modern credit scoring models if lenders had access to data on rent and utility payments.