Credit Reporting is Outdated and Needs an Upgrade
We live in an incredibly connected world today. It’s pretty easy to find out details about any person through a simple Google search. However, when it comes to credit reports, we’re still operating as if ample information is not readily available.
Right now, 92 million Americans have little-to-no credit history, 67 million have a “thin credit file”, and 25 million are completely “credit invisible.” It’s not because these individuals have nothing to report, obviously. They are adults who pay bills, and many of them do so quite reliably. However, traditional credit reports don’t count the data that these individuals have available.
Things like transaction histories, utility payments, rental payments, and phone payments are completely ignored by credit reports, which means that those with little credit are stuck in a cycle of not building credit because they don’t already have credit.
Not only is this credit reporting system antiquated, but it’s costing millions of Americans thousands of dollars with higher interest rates, higher premiums, and being forced to use costly, alternative financial services in the case of an emergency.
In a time where information is constantly at our fingertips about anyone and everyone, there’s no reason for credit reporting to remain stagnant and outdated.