A Brave New World for Credit Reporting
by David Levine, President/CEO
Many credit reports have erroneously attached liens and civil judgements — the staples of credit reporting — to the wrong person. Often without knowing it, persons with these erroneously reported liens and judgements will see a drop in their credit scores.
This article details a change in credit reporting that should address this issue. By expunging these erroneous reports, many people will see immediate improvements in their credit scores.
I’d like to see one other change in credit reporting. It was, in fact, a suggestion made by Harvard sociologist Matthew Desmond — namely, that credit reports should include on-time monthly rent and utility payments made in cash or via money orders. (Money orders are the primary way residents pay their rents to GSH every month).
By including cash transactions, credit reports would capture the sound and responsible payment practices of thousands of households. These households are unbanked, working poor households who live and operate in the cash economy.
These households have been denied credit cards and even bank accounts. They live on the fringes of the credit-driven economy. For reasons of their poor or insufficient credit, they cannot access many standard banking and credit products.
That’s the Catch-22 for them. In other words, they need to be involved in the credit-driven economy in order to build good credit — and prove they are creditworthy.
Credit reporting bureaus should include recurring transactions paid for in cash. For example, I could see where landlords provide copies of payment receipts for rent to the credit reporting bureaus.
It is a simple change. It will make a world of difference to so many households, including many of our own resident households.