| Topics and Issues | Alternative Data (18) Rent reporting (15) Telecom (2) Utilities (2) |
CDIA sent a letter to Sens. Tim Scott (R-SC) and Richard Blumenthal (D-CT) in support of S. 1838, the Building Credit Access for Veterans Act of 2021. The bill was heralded in a press release from Sens. Scott and Blumenthal in May 2021, when the bill was introduced.
CDIA wrote to the senators that their
legislation would better serve veterans by adding rental payments, utility, insurance and other payments not always in credit reports to the information being considered when a veteran applies for a loan guaranteed by the Department of Veterans Affairs. This will make it easier for veterans to purchase a home. CDIA strongly supports efforts to bring these “alternative” data sources into the lending system, since they help consumers access credit fairly and safely. We believe this program will further encourage other lenders to take this information into account, improving financial inclusion for all consumers. A recent study by PERC, a think tank studying credit, found that “(i)ncluding energy utility data in all consumer credit reports increases the acceptance rate by 10 percent, and including telecommunications data increases the acceptance rate by 9 percent, given a 3 percent target default rate.” We firmly believe that adding more data into credit reports will improve lives by improving access to affordable credit.
Providing on-time, positive payment data for our military men and women will pave the way for more financial opportunities. We thank you again for your efforts to assist veterans helping them get credit where credit is due.
Jason Laky, the Executive Vice President, Financial Services, who is a veteran himself, wrote in a TransUnion blog that “[t]he inclusion of alternative data [allows for] an entry point to get a loan or access credit for themselves, their family or their household. Our veterans deserve our gratitude, and this is just one way we can repay them for their service.”