A pilot program to provide credit cards to “credit invisible” consumers who have been shut out from certain banking services because of their nonexistent or insufficient credit history with the traditional reporting agencies is now available.
BBVA Compass and alternative credit agency eCredable have teamed to launch the program.
eCredable’s AMP Credit Score uses other payment history ” like rent and utility payments ” to prove creditworthiness. The bank will consider the AMP Credit Scores of those who apply through the eCredable website for the BBVA Compass NBA American Express Card.
According to the Consumer Financial Protection Bureau, there are 26 million adults without a credit file, while 19 million do not have enough history to be scored using traditional scoring models. Dubbed “credit invisibles,” they often resort to alternative financial services ” check cashers and payday lenders among them.
eCredable, which is a Consumer Reporting Agency under the Fair Credit Reporting Act, works to bridge the credit chasm by giving consumers alternative means of developing a credit score. To verify their payment history, consumers pay eCredable to contact their providers and verify their previous 24 months of payment history. The information is used to create eCredable’s proprietary AMP Credit Score.
As part of the pilot, BBVA Compass will report the new cardholders’ monthly payment history to national credit bureaus to help build or add to their credit files, thereby helping to move them into mainstream financial services.
For data, background and forecasts on Credit Invisibles: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).