Most people have heard of the three main credit bureaus, Experian, Equifax and TransUnion. They are a solid trio and their reports are used to compile your Fico credit score. Yet millions of people do not use credit at all but are responsible bill payers without a credit score. They pay rent and utility bills but don’t rely on loans or credit cards. Ultimately when they want to take advantage of lower interest rates, if they decide to opt for an auto loan, a mortgage, or insurance, they will be charged at high rates, as have no credit score to be assessed on. Not everyone wants to use the credit card route to establish a credit history, and this is where PRBC is an alternative to other credit bureaus.
The Payment Reporting Builds Credit bureau is the 4th credit bureau, unknown to many. It was established to assist people without a credit score to obtain one. Whilst traditional bills such as utilities and rent are only reported to the three main bureaus if they go into default, the positive side of regular timely payments are not reported.
What PRBC do is establish a credit history for customers through recording timely payments to these types of bills. This is hugely beneficial to consumers who make use of the system as it produces non traditional mortgage credit reports which mortgage companies will accept in place of Fico scoring.
How it works is customers sign up to PRBC and can have all their future payments to utilities, rental, child support, day care, cable etc logged. PRBC then compile reports based on the same criteria as Fico scores by recording the type of accounts you have and the length of payment history, the size of the payments and whether the payments are made in a timely fashion. If you choose to you can pay your bills using one of PRBC’s payment partners, Billeo or Account Now, and they will report your payments to PRBC for you, or you can do it yourself.
You can kick start the whole process by providing a history of past payments and PRBC will verify these reports before recording them, for a small fee of $20 for rental payments previously made and $15 for other bills. Otherwise the service is free and you can view your PRBC credit file as often as you like without charge. It is the lenders who pay a fee to PRBC for making use of your report.
Whilst mortgage lenders are happy to do this as it reduces their underwriting costs, a credit card lender may choose not to use this type of report. However it is more likely that they will begin to do so with more regularity, due to the joint venture between Fico and PRBC in the Fico expansion score. Fair Isaacs who run Fico recognize PRBC as a qualified and registered credit bureau as do mortgage lenders.
PRBC is becoming a viable alternative to other credit bureaus as their unique approach to credit scoring enables credit worthy customers who have not previously used credit, the same opportunities to borrowing as those with standard Fico scores. If you regularly pay all your monthly bills on time but have not been seduced into using credit cards, this is an opportunity to have a credit score which will be helpful to you if checked by employers, insurance companies, housing checks and mortgage companies. It may also be the answer if you do choose to embark on the credit or loan route.