Know Your Rights

Credit Access and Inclusion Act

For consumers with an invisible credit history, help may be on the way.  Presently, before Congress is the Credit Access and Inclusion Act, a proposed amendment to modify the Fair Credit Reporting Act ("FCRA") to include additional positive information to consumer reports, like utility bills and rental payments. 

If you are one of millions of American consumers who do not have a credit card or a mortgage loan you understand how difficult it is to build your credit and getting credit when you have no credit is next to impossible.  This double edged sword is precisely the reason why Congress is considering this proposed bill, so that credit-less consumers can show they are worthy of borrowing money.

The Act is fairly straight forward.  Because not all consumers carry a credit card or own a home, their credit is virtually non-existent.  By reporting a consumers utility bills, like electricity, telephone, internet and cable service or rental payments, previously invisible consumers can begin building a credit history and be considered credit worthy by banks and financial institutions instead of a credit risk.  As it stands, utility bills and rental payments are only currently reported if a consumer is late on payments or if the consumer fails to make rental payments at all.  Why should consumers be punished for poor repayment habits and not rewarded for stellar ones?

Allowing this bill to pass would provide groups like minorities, college-age consumers and low-income consumers the opportunity to enter into the financial world and be eligible for better loans opportunities.  The assumption is that if you do not have a credit history you are considered high risk and no one wants to approve you for a loan or will only approve you at unreasonably high interest rate.  Because consumers with minimal credit history cannot get a loan they turn to payday loans and end up destroying their chance at good credit.   

Those in opposition of this bill argue that including utilities on consumer reports will just open the door to more inaccuracy.  As it stands consumers reports are full of errors and those in opposition argue the additional information will end up harming consumer reports and create more of a burden on consumers to dispute the inaccuracies. 

If you wish to discuss your credit report with a licensed attorney or receive more information on the Credit Access and Inclusion Act contact SmithMarco P.C. for a free case review.

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