Banks In This Nation Will Offer Credit Cards Without Credit Score! How Will It Work Out?
Those without a credit score in the US can now obtain credit cards from major issuers, something that was out of reach for them in the past.
Significance Of Credit And Beneficiaries
There are over 50 million Americans who do not have a credit score so when they need credit their only option is often costlier alternatives such as payday loans.
Credit score is an important asset if one wants to obtain other forms of credit at reasonable rates including auto loans, mortgage loans, and student loans.
Part Of A Larger Initiative
Major American banks such as Chase, U.S. Bank, Wells Fargo will participate in a pilot program as part of Project REACh, or Roundtable for Economic Access and Change.
The project is an initiative of the Office of the Comptroller of the Currency and its partners who aim to help disadvantaged communities gain credit access.
How The Program Will Work
As part of the pilot program, the banks will share checking and savings account information in order to gauge the credit worthiness of the applicant.
Other aspects of a person’s financial history they could consider before issuing credit includes those that prove a high degree of financial responsibility.
For example, an applicant’s chances for credit gets boosted if they have no overdrafts or returned checks on their checking account.
Proof Of Credit Worthiness
The banks could also partner with financial data aggregators which they can use to review a person’s history of rent and utility payments.
All these will be taken into consideration because they give hints as to the money managing ability of a person .
The program will launch later this year.
Potential benefits are huge since those getting credit cards for the first time can start building a credit history and with good financial habits, can get access to a host of other opportunities.