12-28-2012 08:28 AM
I just posted in the general credit forum asking about "Alternative Credit Data" to ask if anyone knows anything about this, so maybe follow that thread as it develops.
What I was able to find out for you is:
There is a law called the Equal Credit Opportunity Act which states that if you are applying for credit or a loan you have the right to provide potential lenders with information regarding your on-time payments of rent, insurance, etc. And they must consider this in making a determination about your credit. The reason this is difficult is the question of- how do they factor this information into what they normally do? There is no consistent way...
I found a company called eCredable.com that will use your rent, utility, insurance, child care, tuition, etc. to build an 'alternative credit report' for you which is a good looking document kind of like the myFICO score summary. Might be worth looking into. I haven't used this service so I have no idea whether it is good. And they do charge for it. But if you are applying for a home or auto loan where you would sit down with a person for review and approval you would have something to support your case..
Here is the article about it from the credit.com blog:
12-28-2012 10:59 AM
I would presume that if a creditor wished to consider timely payments on unreported accounts, they would be just as happy with review of your account records, which are first-hand documents, as they would with a third party "report."
I dont see a substantive difference that would be worth a fee.
12-28-2012 11:46 AM
Has anyone heard anything about services that DO report your rent/utility on time payments to the CRAs if you pay via their service?
I read an article on some finance site the other day about a service called RentReporters that, for a processing fee like 8 bucks a month or so, would charge your rent via a credit card or your debit account and cut the check for you to your landlord. Then they would report to all 3 bureaus as a means of establishing 'alternative credit.' The article mentioned some other service that does this for utilities as well.
Do any of these work? I was hesitant to jump on board because I was a bit skeptical that CRAs would factor this into the score, and there is no sense paying a fee for what might not work...
There is a company called NPS -- Neighborhood Pay Services that does this. but I dont know if they do this on an individual basis or only with whole subdivision/rental complexes .
12-28-2012 05:09 PM
Cell phone service isn't a line of credit. Its a service that you pay for.
Another thread comes to mind: Why don't insurance companies report good payments. Its a service that you pay for. Not a line of credit. Most insurance companies will just cancel your premium if you don't pay. Not hold you to a 6 month (or 12 month) premium and turn you to collections. Cell Phones will do both. They will cancel your service and if have a contract they will turn you to collections for breach of contract.
Bottom line: Cell Phone is a paid service (product) and not a line of credit. Sorry if someone mislead you while you were considering getting your cell phone service.
12-28-2012 10:47 PM - edited 12-28-2012 10:49 PM
This is a great point.
I do think rent should be factored into credit and I hope the industry does head in that direction. You could make the argument that it's not a line of credit but if it were my house and I were letting you live there, that's extending quite a bit of good faith. Not precisely credit but similar exchange of something that is mine for a payment you will make me later based on your written agreement to do so. I would imagine that as far as statistics go, one's ability to pay rent on time every month is fairly predictive of their ability to meet other such obligations in a timely manner.
Just my two cents.
12-29-2012 06:24 AM
I would agree wth you. Even though cellphone compamy is a service, but you have excess to racking up the phone bill quite a bit without any limitations. For example......if I'm making international calls that is not included in my monthly plan, I can talk to someone overseas for hours and hours @ 25 cents per minute everyday for a month without any limitations and end up with a $1500 phone bill at the end of the month. So even though it's not a credit line per say, but it still an unlimited balance that can easily be racked up. Specially if my phone is $200 every month and I've been paying it on time monthly, that's a large sum for not getting any reporting credit for. It's sort of like an Amex card net terms 30 days pay in full. That's just my opinion. Thanks for everyone's input.
12-30-2012 05:27 AM
$200.00 a month for having a phone in your pocket...... That's asinine. I wish you luck!
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