Alternative Credit Score from the PRBC Inc.

Homebuyers in the United States having low FICO scores can now obtain alternative credit reports and scores. These scores are assigned on the basis of their on-time payments to landlords, cable companies, utilities and other recurring accounts excluded from the national credit bureau files.

The PRBC Inc. provides the alternative credit report and score. It focusses on gathering consumers' alternative account data and maintaining the data electronically. The PRBC verifies information related to rent, utilities, cable, child support and even payday loan account. The information is then compiled in the credit reports and the scores are provided on the basis of the collected data. Lenders use these scores to assess the creditworthiness of individuals who either have poor banking account history or whose FICO scores do not reflect timely rent payments and other monthly payments.

Under the agreement between the National Credit Report Association (NCRA) and the PRBC, credit agencies under the membership of the NCRA verify consumer data supplied to the PRBC. When a mortgage lender asks the credit agency for the credit report of the loan applicant, the agency first verifies the applicant's national bureau files and FICO scores. In case the score is too low to acquire the loan, the lender enquires about rental and other expenses that are usually not reported to the national credit bureaus - Equifax, Experian and TransUnion. The credit agency verifies the expenses on rent, cables, utilities etc from the respective sources only if the homebuyer can provide written documents of the related expenses of past 1 year or more.

After checking the data, the PRBC and the credit agency provide the mortgage loan officer with a revised credit report including verified accounts not included within the national bureaus files. The PRBC also provides the bill paying score (BPS), which the lenders can use to raise the FICO scores. BPS has values in the range of 600s. BPS offers points to be added to the on-time monthly payments for a time period of 1 to 3 years. Any loan applicant with a FICO score in the mid 500s can have that number raised to something within 600s. This will help him to qualify for loans at low rates and fees.

The service of offering alternative credit reports can be of great help to homebuyers who are forced to acquire subprime loans with higher rates just because they have low FICO scores. Under the Federal Equal Credit Opportunity Act, lenders who go through national credit bureau data for underwriting mortgages should also look for additional information not documented in the bureau files. Such information may prove useful in judging an applicant's creditworthiness.