Credit Help Center

We all know that just one missed credit card payment can negatively impact your credit scores. But what if you don’t use credit cards at all or even have a traditional bank? Millions of people in the United States have little or no credit, good or bad. This is why credit agencies are pushing to widen the criteria used to determine credit scores.

According to an article in the Atlanta Journal-Constitution, people with little to no credit are referred to as having thin credit files. Having little to no credit can make it hard for them to get traditional loans or even pass a background check. Even though most people with thin credit are not captured by the traditional credit net, they still make payments for telephone or Internet service, as well as utilities. Because of this, credit agencies are seeking to widen the credit net used to determine scores.

The credit bureaus assert that widening the net will allow lenders to make safer credit decisions that could affect millions of people. And because several agencies are now collecting data on job history, assets, income and even rental history, lenders can access that information as well. Consumer groups have doubts about adding these new credit factors, citing higher percentages of low-income people having histories of delinquent utility bills. Another problem stems from the fact that some states require consumers to miss a utility payment in order to receive energy assistance.

As the Atlanta Journal-Constitution article explained, Equifax is one credit bureau using alternative forms of data to evaluate creditworthiness for credit card companies, auto lenders and mortgage firms. In Georgia alone, 12.2 percent of households are unbanked, which means they don’t use a traditional bank and there is no way to judge their credit worthiness. Overall, 35 million people in the U.S. aren’t scored or barely registered in the bureau’s traditional database. Equifax believes the alternative methods of scoring will help millions of unbanked people become creditworthy. Of course, lenders are now using these additional factors on all customers, not just those with little to no credit history.

Because credit bureaus and lending agencies are starting to look at more than just credit cards and mortgages, staying on top of your credit situation is more important than ever. If you’d like to see your credit scores and reports from the three major credit bureaus – Equifax, Experian and TransUnion – sign up for the Power of 3 from FreeScore. Not only will you receive unlimited access to your three credit scores, but you’ll also gain peace of mind with 24/7 credit monitoring and automatic credit alerts at all three credit bureaus. That’s the kind of credit management and protection you need, regardless of what criteria is used to evaluate your creditworthiness.

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