Consumers with no credit history – and those who are trying to rebuild credit after experiencing financial difficulties – often find it nearly impossible to get that first loan or credit card to begin building a good credit score.
Unless you have a credit record to show that you’re a responsible debt payer, no one wants to give you credit. It gets even worse if you’ve got a past record of non-payment. And if you need to show responsible use of credit in order to get credit, it feels like you’re stuck between a rock and a hard place.
If you find yourself in this situation, you may feel very alone, but you’re not. It turns out that over 50 million Americans have little or no credit history. And millions more have a credit history that needs to be repaired.
The good news for you is that a company called Pay Rent Build Credit, Inc. (PRBC) is offering a solution. Called America’s Alternative Credit Bureau, they’ll help you build credit for bills you’ve already paid, even though those bills are typically not reported to traditional credit bureaus.
These are monthly expenses such as rent, telephone bills, insurance bills, cable and satellite TV bills, power bills, and even day care expenses. Typically, these are only reported to credit bureaus if your payments are late or in default.
For a small fee, PRBC, using information you supply, will verify your past payment of these accounts. Then, if you sign up through them for on-line bill pay, they’ll keep an ongoing record of payments.
Creditors with whom you’d like to do business can then request copies of your PRBC credit report - just the same way they request a credit report through any of the “Big 3″ Credit Bureaus. The difference is that you must first give permission.
Once you’ve shown a good record of payment of rent and 3 other bills for 12 months or more, a PRBC credit report can even help you qualify for a mortgage loan. In the meantime, it can help you get a credit card – or a better rate on a credit card, and can prove to a potential landlord or employer that you are a responsible consumer.
Often, consumers who have made a life-long habit of paying cash for every purchase are shocked and angered to find that they don’t qualify for a mortgage loan. They feel that they’re being penalized for responsible behavior – and they are. Mortgage companies, along with other credit issuers, want to see a track record of monthly payments. PRBC is helping those consumers prove that they are indeed credit worthy citizens.
Because the size of this market offers vast opportunities for profit, several other companies – including Fair Isssac – are either implementing or working on plans to implement some version of an alternative credit reporting service.
