Proposed Changes to Credit Score Reporting

 Posted on October 23, 2013 in San Antonio Bankruptcy Attorney

A person’s credit score represents the riskiness of lending that person money.  Banks, credit card companies and car dealerships all use this information when approving or denying a credit application.  The score is weighted on a scale up to 850 based on payment history, length of credit history, accounts owed, types of credit used and whether new accounts have been opened.

Consumers who handle their credit accounts well and make payments on time have a higher score.  Those who miss payments, open too many accounts, or who don’t use credit or loans will have a lower credit score.  Filing for bankruptcy will also lower your credit score because you do not have to pay back your debts.

Now a new bill looks to expand on what is reported on credit scores.  The bill is called the “Credit Access and Inclusion Act” and was introduced during the summer of 2013.  The goal of this bill is to allow people who haven’t built up a credit to get credit for paying rent, utility and cable bills.  A recent survey of over 1,000 renters showed that around 70 percent would want their non-loan payments to be reflected in their credit scores.

Advocates of the bill say that it will help people who are trying to build a credit score get more affordable credit rates.  It also allows those without any credit history a chance to build their credit score.  Congressman Keith Ellison, a democrat representing Minnesota and co-author of the bill, stated that  "our current credit reporting system leaves more than 50 million people without a credit score...Including more data in credit reports will make it easier to get and improve a credit score."

Those who detract from the bill say that people are better off when credit bureaus know less about them.  Making the credit score include other accounts makes it more likely that mistakes will be penalized.  But if this law passes, it will make it a lot easier to recover from filing for bankruptcy.  If you are considering filing for bankruptcy, then contact an experienced bankruptcy attorney in San Antonio today.