Experian Has New Credit Score System
Not everyone has heard of the company Experian. They are a data collection and credit reporting bureau. They have developed a new credit score system that just may be able to get those who are considered underbanked a bank loan.
When creating this new credit score system there were many things that Experian took into account. Things that the traditional credit score system has never taken into consideration, are now be considered for the credit rating from Experian. Not everything will be different with this new credit score system though. Like the traditional credit score system, it will have a range from 401 to 900. This will make it easier for those not completely familiar with the new system to understand.
There is a wide variety of information that this new credit score system will be taking into account that the traditional credit score never considered. The first thing that this new credit score system is taking into consideration is payday loan repayment history. It shows that the people who have used payday loans do have a repayment history, good or bad. That is something that can show a lender that the borrower has a history or repaying a loan on time, or that they do not.
Another new component to the new credit score system is rental payment history. This too shows whether or not a borrower has a history of paying on time or not. This too should be important to a lender, knowing whether or not they pay rent on time can be a good indication of whether or not they will make their loan payments on time.
This new credit score system even looks at public records. It not only looks at them, but it takes a very close look at them. It looks for things such as missed child support payments. To a lender this too is important information when determining if the borrower will be able to make payments on time.
This new system for calculating credit scores can be a big deal for those who would not have a rating with the traditional system. Many people who would not be eligible for loans before are considered to be eligible for loans with this new system. The underbanked now have a way to get the loan they need, where they may not have had that chance before.
Everyone from banks to credit unions to auto lenders are planning on using this new system to be able to help more people get the loan they need. However, they are not the only ones who plan to start using this new system. Phone and utility lenders are also going to be looking at this new system to decide whether or not they will provide their services to someone. It tells them about their payment histories for everything they needed to make payments on in the past, giving these companies a better idea of whether or not they want to do business with these people.