Scott, Colleagues Lead Bill to Expand Access to Credit for Hardworking Americans
Washington, D.C. – Senate Banking Committee Chairman Tim Scott (R-S.C.) introduced the Credit Access and Inclusion Act, legislation to responsibly expand credit access for millions of Americans with limited or non-existent credit histories. By allowing property owners and utility and telecom providers to report payments data to credit reporting agencies, this bill will help consumers with an established track record of paying their bills on time develop a positive credit history.
Senators Mike Rounds (R-S.D.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), and Bernie Moreno (R-Ohio) joined Chairman Scott on the bill.
“It’s simple, if you pay your bills on time, your credit score should reflect that. This commonsense bill will reward hardworking Americans who manage their finances responsibly, expanding access to credit to help them purchase a home, finance their education, or pursue their dreams,” said Chairman Scott.
“Over 40 million Americans are considered ‘credit invisible,’ with no history of payments attributed to their credit score. This places them at a disadvantage when it comes to gaining access to credit,” said Senator Rounds. “Our legislation would allow credit bureaus to collect alternative data, such as on-time rent and utility bill payments, helping to build out a credit history.”
“Hardworking Alabamians and Americans who have demonstrated financial responsibility deserve a pathway to establish and build their credit,” said Senator Britt. “This bill takes into consideration the varying circumstances and experiences of individuals who hope to achieve their American Dream. Access to credit is a crucial component to establishing financial stability and economic independence for individuals and families – this legislation simply incorporates a more complete history of on-time payments, like rent and utilities, to reflect an accurate credit score and open the door to financial opportunities.”
“Millions of Americans pay their utilities, their rent, and their phone bill and other things on time every month, but the narrow scope of credit reporting today doesn’t include these payments, so it doesn’t get calculated into their credit score. Our bill is really a simple fix to expand the credit reporting that will then allow these responsible Americans to build credit,” said Senator Cramer.
“Having a good credit score means the opportunity for Americans to make pay less interest. This is especially important for large purchases like cars and homes,” said Senator Moreno. “It’s common sense that paying your rent, utilities, and phone bill on time should be a positive factor in your credit score, and I am proud to cosponsor this bill to expand the number of Americans who are ‘scoreable’ and able to access credit.”
Representative Young Kim (R-Calif.-40) is leading companion legislation in the House of Representatives.
“Having good credit opens new doors for Americans. Unfortunately, our credit system has not kept up with technology, keeping Americans from building their credit score despite showing consistent positive financial behavior, such as paying their utility or cable bills on time,” said Representative Young Kim, co-chair of the House Financial Literacy and Wealth Creation Caucus. “The Credit Access and Inclusion Act expands ways for hardworking Americans to grow their credit and get a leg up. I am proud to lead this commonsense bill with Senate Banking Committee Chairman Scott, and I will keep being a loud voice for access to opportunities for Americans to achieve their dream.”
BACKGROUND:
Approximately 26 million Americans are “credit invisible,” meaning they lack credit records or history of traditional payments, such as student loans, car loans, or mortgage payments. Having no credit or thin credit makes economic mobility difficult and hampers an individual’s ability to purchase a home, take out student loans, buy a car, or even get a job.
The Credit Access and Inclusion Act allows credit bureaus to collect payments data for services not traditionally factored into credit reporting, such as rent, internet, phone, electricity, and utility payments. Factoring these payments into credit reporting would expand credit histories and generate credit scores for consumers who were previously “unscoreable.”
For bill text, click here.
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