CREDIT BUILDERS ALLIANCE’S goal is clear: help organizations move people from poverty to prosperity. To that end, CBA has been a bridge for 600 nonprofit agencies to help millions of individuals with bad or no credit to participate in the mainstream financial system by building good credit.
One way Credit Builders Alliance bridges the credit gap is collaborating with Equifax on the CBA Reporter, a solution for nonprofit lenders to report loan data to consumer reporting agencies for the purpose of building individual credit.
Another way CBA is helping people build credit is bringing attention to the concept of rent reporting as a driver for credit access. CBA says reporting rental payments to credit reporting agencies offers an opportunity to build credit as a financial asset without taking on additional debt. Just as homeowners build credit through mortgage payments, CBA believes renters should have the ability to build credit through rent payments.
“If you are a renter in the United States, the rent payment is traditionally not reported to the credit reporting agencies, and your payments are not being reflected in the credit report,” said Dara Duguay, CEO of Credit Builders Alliance (pictured below). “This is the case even though it could be a good way to make those without credit histories visible.” According to Duguay, rent reporting could enhance financial inclusion, particularly when the payment history indicates a tenant’s pattern of paying on time and avoiding late fees and evictions.
The organization has been incentivizing rent reporting by reaching out to affordable housing providers and walking them through the process of reporting rent payments to the credit bureaus. In New York, for instance, the organization works with the New York City Housing Authority, which has 500,000 residents living in affordable housing.
“We’re proud to support the community work of Credit Builders Alliance,” said Chris Hobday, vice president of U.S. Information Solutions at Equifax and Credit Builders Alliance Board member. “The discussion around alternative data such as rent reporting and bank transaction data for credit scoring is growing since it has the potential to improve outcomes for both individuals and lenders. Equifax is committed to responsibly expanding access to credit and helping people live their financial best.”
Through the Equifax Foundation, the data, analytics and technology company partners with community-based organizations with the goal of helping people gain access to credit and building safety nets for historically underserved communities. Along with CBA, other organizations that Equifax collaborates with include the Builds Credit programs in Atlanta and St. Louis. These partners provide residents with better access to the tools people need to establish and/or build credit.
Another organization Equifax works with is Kiddie Kredit, which takes what kids do every day - chores - and links that behavior to offering youth ‘credit scores’ through a downloadable app. Kiddie Kredit’s model of building good behaviors around chores is a concept that can lead to positive outcomes and build responsibility and accountability, according to Bev Anderson, president of global consumer products at Equifax.
“Our community partners are at the forefront of building financial inclusion through traditional and innovative means,” said Anderson. “Whether through alternative data, strategic partnerships or downloadable apps, our goal is to continue to increase the ways we help enable access to credit for more people so they have better opportunities to thrive.”