U.S. Reps. Young Kim (R-CA) and Janelle Bynum (D-OR) have introduced legislation they say will help Americans build better credit.
The bipartisan Credit Access and Inclusion Act would help Americans with little or no credit history build and improve their credit scores. An estimated 26 million Americans are considered “credit invisible” or lack a history of traditional payments on things like student loans, car loans and mortgage payments, the law makers said. Their legislation would allow Americans to build credit by expanding what counts toward their credit history, including rent, internet, phone, electricity and utility payments.
“Having good credit opens new doors for Americans. Unfortunately, our credit system has not kept up with technology, keeping Americans from building their credit score despite consistently practicing healthy financial behavior,” Kim, co-chair of the House Financial Literacy and Wealth Creation Caucus, said. “The Credit Access and Inclusion Act brings credit reporting into the 21st century so hardworking Americans can grow their credit and get a leg up. I am proud to lead this commonsense bill with Rep. Bynum, and I will keep being a loud voice for access to opportunities that keep the American dream alive.”
The legislation would allow landlords, utilities and telecom providers to report on-time payments to credit reporting agencies. But the legislation would also protect consumers by allowing them to opt out of reporting these specific categories and ensuring utility companies cannot report late payments if the consumer is meeting the terms of a repayment or debt forgiveness program. Additionally, the legislation would require the federal government to study the impact of the expanded reporting and examine how additional data would improve credit scores.
“Every American should have the opportunity to participate in our economy – building credit plays a big role in making that happen,” Bynum said. “Everybody has to start somewhere, and making rent and utility payments on time should count. My bill makes it easier for people to build good credit when paying for their monthly expenses, and I’m proud of its bipartisan support. I’ll continue to work with anyone to make sure my constituents aren’t boxed out of the American dream.”