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Credit Help For Renters And Others On The Horizon
Sue is a homeowner and pays her mortgage and other bills on
time like a good credit consumer. Sue's on-time mortgage payments
are reflected in her credit score profiled by the three major
credit bureaus; Equifax, Experian and Trans Union.
Joe on the other hand is a renter, who wants to buy his first
home in the near future. He pays his rent on time every month as
well as his phone and utility bills. Joe is also a good credit
consumer but his on-time payments are not reflected in his credit
profiles. Why? Because the major credit reporting agencies are
not set up to track this type of payment and therefore they are
not reflected in Joe's credit score. Chances are good that Joe's
credit score will be lower than Sue's because his on-time rent
payments go untracked by the credit bureaus.
As a result Joe will be quoted a higher interest rate and
higher fees to his lender when he applies for his first home
mortgage. Seems a bit unfair doesn't it? The good news for Joe
and other renters like him is that the credit reporting system is
about to change.
In a recent Chicago Tribune article, reporter Kenneth R.
Harney points to the creation of a new national credit bureau
whose "sole mission is to track the payments that nobody else
tracks." The new credit reporting agency PRBC (Pay Rent, Build
Credit) wants to build credit files on as many as 10 million
renters nationwide over the next 5 years.
According to PRBC's founder and chief executive Michael
Nathans, the new bureau will earn revenue by selling supplemental
credit reports to lenders. CitiMortgage, Inc., one of the
nation's major home lenders, is already a subscriber of the new
service.
Some other highlights of PRBC's service include:
- 24/7 access to online files by consumers, free of
charge.
- Consumers must give permission to have their files accessed
by lenders.
- Consumers can input up to 36 months of documented on-time
payments.
- They accept payment histories from phone, credit and debit
cards so long as the source (merchant) can send a date-stamped
electronic receipt of payment.
- Many consumers who bank online can have their payment
information recorded by PRBC once the bureau becomes fully
functional
PRBC can benefit not only renters but also young and minority
borrowers who have little or no credit history with the
traditional bureaus. "We think we can help create equal credit
opportunities for everybody who deserves a a prime rate loan, "
Nathans said.
Consumers can register for free with the new bureau online at
http://www.payrentbuildcredit.com.
About The Author
© 2003 James H. Dimmitt, www.yourfreecreditreportnow.com
James is editor of "To Your Credit" a FREE weekly newsletter
for consumers. You can subscribe at http://tinyurl.com/bgo9
jimdim815@aol.com
MORE RESOURCES:
Credit - Google News
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