FICO Expansion Score
If you needed to check your credit score, how would you go about it?
When lenders and businesses need to evaluate your credit history before approving new credit, where do they look?
The majority of consumers and for a certainty, all businesses would follow the traditional route and go straight to one of three credit reporting bureaus: Equifax, Experian or TransUnion. For years these agencies have provided consumers with a score that reflects their credit activity. This score is based on your credit card, mortgage and bank loan.
Recently though, consumers have been turning to a new type of scoring based on different kinds of credit that previously haven’t been reported on. The FICO Expansion score is formed from the analysis of recurring items such as rent, insurance payments, satellite/cable, utilities, child support payments and day care. This score gives a second, more detailed layer to a consumer’s report.
Although relatively unknown, PRBC is one of the largest companies to provide this extra layer to the three main credit bureaus and directly to the lender. To get know a little more about PRBC and their role in credit scoring, let’s answer a few common questions about them.
What is PRBC?
The company PRBC is, by it’s own definition “the largest non-traditional Credit Bureau in the World”. This means they create credit reports based on information that traditionally isn’t included in other credit reports. The company was incorporated in 2002 under the name Pay Rent Build Credit but the name was later shortened to PRBC and the concept was changed to Payment Reporting Builds Credit.
Is PRBC related to the 3 big credit bureaus TransUnion, Equifax and Experian?
No. PRBC is similar to those credit bureaus in that it’s a credit reporting agency. However, whereas the traditional big three agencies create a report based on credit card activity, loans and mortgages, PRBC’s report is based on recurring bill payments like rent, car loans, subscriptions and insurance.
What other differences are there between PRBC and the other credit reporting bureaus?
PRBC is unique in that people can self-enrol and self-manage the information used in the report. Also, PRBC provides a free service; the company does not charge you to view your PRBC information, unlike the other agencies who only allow you one free report per year.
PRBC provides the consumer with a report and a bill payment score (BPS). These provide an analysis of how you have paid your regular bills over the last 3 years. It will indicate any late or missed payments or any other issues related to your recurring payments. These are used alongside your regular credit scores given by the main credit scoring bureaus.
It’s understandable to be cautious when it comes to your finances, so making sure a company is reputable before using them is vital.
Can PRBC be trusted?
PRBC has received funding and support from the charitable organisation, The Ford Foundation. Along with their backing, comes the affiliation and partnership with other large organisations such as Fannie Mae and Freddie Mac. The mortgage unit of Citigroup, Citimortgage, has also subscribed to receive data from PRBC which further validates the reputation of the company.
Many consumers are convinced by such strong credentials, but are unsure where PRBC can fit in to their financial portfolio. Understanding what the report looks like and includes can help.
What exactly do you get from PRBC?
PRBC provides you with both a score and report. You can view your score at any time by logging in to your account. You can also download your report from their site at any time.The report itself follows a standard format familiar to lenders that use the merged credit reports. The only difference is the addition of the PRBC Bill Payment Data and the Bill Payment Score.
It’s useful to note that the PRBC report and score can be used as a separate report or it can be combined along with your reports from Equifax, TransUnion and Experian.
The combination of these reports gives a much more detailed and accurate assessment of your creditworthiness. In what other ways can PRBC help you?
The Benefits of using PRBC
PRBC helps you as a consumer in two main areas: 1) Building good credit and 2) Saving money.
Building credit – For a variety of reasons many people have little or no credit history logged with the traditional credit bureaus. Others may have a very poor history leading to a poor traditional score. PRBC is the only agency that uses your everyday bill payments to build positive credit history. This non-traditional report is based on bills such as rent, utilities (electric, gas, oil), telephone (home and cellphone), Internet, insurance and many others.
This demonstrates to creditors that you have a proven history of paying bills on time and thus fulfilling your financial responsibilities.
Saving Money – The PRBC report gives lenders a more complete profile when determining future credit arrangements. Being able to present a positive payment history and thus demonstrating fiscal responsibility increases your creditworthiness. As a result, it could save you thousands on mortgage rates, loans and insurance as well as for security deposits.
Whether your credit history is positive, negative or non-existent, the PRBC report has significant benefits. The only thing left to do is sign-up.
How to apply for your PRBC report
Becoming a member of PRBC couldn’t be easier. Visit www.prbc.com and select ‘Create Account’. Once your account is verified, you can start to assemble your credit report by adding any bills and payments you have paid over the last 2 years. The more information you provide, the more accurate your score will be.
Once checked, your score will appear on your account dashboard and you will be able to download your report at any time.
Once you have your score and report, make sure you use it.
How to use your PRBC report
When applying for any kind of credit, you must demand that the lenders consider your PRBC report alongside the traditional credit reports. According to the Equal Credit Opportunity Act, lenders are not permitted to refuse this request and must consider the combined report when deciding on whether to give credit or not.
The PRBC website gives simple and clear instructions on how to make this request.
Remember to keep your account information up-to-date and reliable in order to reflect an accurate score and give you the best chances of getting the credit you need.
However, even with your new, flourishing credit report in hand, you may still have questions about this new kind of credit scoring.
Understanding the New FICO Expansion Score
The new FICO Expansion Score was introduced by Fair Isaac Corporation to provide an additional layer to the original credit reports. It provides an alternative credit risk score based on non traditional credit data. This new score was specifically designed to allow creditors to provide credit to consumers who were unable to provide a traditional credit score due to “thin” or non-existent credit histories.
This new expanded score accomplishes a number of objectives:
It aids lenders in extending credit to consumers who are otherwise ineligible due to their lack of credit history. The new score has been expanded to analyze a wider range of data sources including that from non-traditional sources such as monthly bills and recurring payments. Therefore, this new score gives a more complete, more accurate picture to lenders when assessing applications for credit.
It helps consumers build up a positive credit report quickly and consequently gives them faster access to different credit products such as credit cards and loans. By assessing financial data normally overlooked by traditional reports, the new score provides reputable lenders with a reliable basis for credit related decisions.
Being a credit risk score, it’s an accurate prediction of whether someone is likely become delinquent in the following 2 years.
Accuracy is guaranteed. As the name indicates, the FICO Expansion score is part of the FICO score family which has a solid reputation for reliability and accuracy.
So, what does this expansion mean for consumers?
For the first time, millions of consumers will be able to use the credit they have had all along, hidden from the view of traditional reports. Those without any personal history such as young people, immigrants, and those recently divorced or widowed will be able qualify for credit faster.
It’s time to forget the old fashioned credit evaluations where applicants were forced to provide a copious number of documents and references, verification of payments, and employment and personal information. The new FICO Expansion Score eliminates the need for such tedious and time-consuming work.
The FICO Expansion Score is recognition that it’s not the odd missed or late payment that reflects our true creditworthiness. Instead, it’s the pattern of diligent, consistent and punctual payments for daily essentials that demonstrate our reliability and capacity to take responsibility.
Rather than simply deducting points from your score for your errors, the new FICO score analyses a much broader spectrum of data and how the separate elements relate to each other. This generates the best possible projection of an individual’s future credit performance.
Without a doubt, the change has bought real benefits to the operations of businesses and lenders as well as consumers. Before the new score was introduced, lenders were forced to rely on guesswork, or at best, estimates that were largely based on misconceptions. The new score fills in the gaps and allows the creditors to make a truly informed decision giving the consumer an impartial evaluation based on the data that is relevant. Moreover, customers can enjoy a much faster service, access to scores and reports at any time and most importantly, a much greater likelihood of being approved for credit.
The chances are, you are one of the the millions of consumers who could benefit from using the new score. For more information on how to access your FICO expansion score, visit www.prbc.com