Credit Reporting Changes for 2019
After the 2008 financial crisis, many lenders tightened their lending standards, making it difficult for some consumers to get financing. As a result, the credit-reporting industry has been changing the way it does business due to regulatory pressure and requests from banks and other lenders that want to make more loans available to more people, not only those deemed the most credit-worthy.
For example, Fair Isaac Corp., creator of the FICO credit score, plans to launch a new credit score in partnership with Experian that factors in consumers’ history managing their checking and savings accounts, potentially raising the credit scores of consumers who keep several hundred dollars in their accounts and don’t overdraw. All three major credit reporting firms — Experian, Equifax Inc. and TransUnion — have been removing information like tax liens and judgments from consumers’ credit reports.
Experian PLC plans to launch a new service called Experian Boost sometime this year. To use this service, consumers must opt in and link the bank accounts they use to pay their cellphone and utility providers to Experian, allowing the company to track their monthly payments. Boost will also factor in landline-phone and cable-TV accounts. This is expected to help those with low or no credit scores due to a limited credit history, because paying phone and utility providers consistently could be a sign that they will be equally diligent about paying other bills as well.
This marks the first time U.S. consumers will be able to provide this data for their credit reports, and is the latest in a number of changes expected to increase credit scores for millions of consumers.
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