Little Credit History? Lenders Are Taking a New Look at You

About 45 million Americans lack traditional credit files, and the federal government is looking into whether alternative credit scoring models could bring more of these consumers into the financial mainstream.

The Consumer Financial Protection Bureau opened an inquiry this month into the pros and cons of using “alternative” data, like rent and cellphone payments, to formulate credit scores. It is seeking feedback from the public and the credit industry.

Credit scores — many of which are also known as FICO scores, because they were created by the company Fair Isaac — are used by lenders to determine whether you can borrow their money, and what interest rate you will pay. The three-digit scores are created by applying a mathematical formula to information compiled by the three major credit bureaus.

Those bureaus — Equifax, Experian and TransUnion — generate credit…

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