AFC announces its support for the Credit Access and Inclusion Act

With this legislation, individuals could benefit from expanded access to affordable credit through the use of alternative payment data, including rent, utilities, phone, and internet bills, in consumer credit reporting. As part of the letter, the AFC commended the bill for providing a solution for underserved Americans who manage their funds efficiently but still find it difficult to access credit. Representatives from the AFC mentioned that, as many US residents remain credit invisible due to them not accessing traditional financial products, the council supports the Credit Access and Inclusion Act, which is a pragmatic policy that will bring Americans into the financial mainstream by accounting for how they manage their money.

Facilitating credit access for the US

According to the AFC, 26 million Americans do not have a credit file, while another 19 million hold unscorable credit histories. This gatekeeps them from essential opportunities such as homeownership, auto loans, and higher education financing. The council has been focusing its efforts on advocating for the responsible use of alternative data, non-traditional payment records that reflect a more accurate image of financial behaviour.

With the new legislation, landlords, utility providers, and telecom companies could offer on-time payments to credit reporting agencies, allowing consumers to develop credit histories and benefit from access to financial products at convenient rates. Additionally, the AFC highlighted that the bill reflects in-depth research and consensus between stakeholder groups that incorporating rental, utility, and telecom payments into credit reporting can scale access to credit. By updating the Fair Credit Reporting Act, the Credit Access and Inclusion Act is set to build on the activities pursued by industry participants to capture and leverage this data to augment economic mobility while maintaining consumer protection.

Furthermore, the AFC is committed to promoting a transparent, inclusive, and customer-focused financial system by facilitating innovation in financial services. Also, the council’s members centre their activities on fostering competition in consumer finance and optimal products to meet the needs, demands, and preferences of underserved consumer segments and geographies.