TransUnion Launches TruVision Alternative Bank Risk Score: A New Credit Scoring Model for the Financially Underserved
Introduction
For individuals without established credit scores, TransUnion introduces the TruVision Alternative Bank Risk Score, a game-changer in financial inclusion. This model harnesses both positive and negative data from banking histories, providing a more comprehensive assessment for credit access.
Key Features
* Expanded Credit Accessibility: Individuals with no credit cards or loans can now build up a credit score based on their checking and savings account activity.
* Range and Usage: The score ranges from 500 to 900 and will be utilized specifically for unsecured loan applications where traditional credit scores may be lacking.
Lender Adoption and Calculation
* Lenders may soon incorporate the TruVision Alternative Bank Risk Score to evaluate borrowers with limited or no credit history.
* TransUnion has not yet fully disclosed the score's calculation methodology, but it incorporates both positive and negative banking data.
Potential Factors Included
Analyzing similar banking reports from ChexSystems and Early Warning Services, potential factors considered include:
* Account applications (number and frequency)
* Account closures (involuntary and reasons)
* Unpaid bills (overdrafts and bank fees)
* Check-writing history (returned, bounced, and fraud)
How to Improve Your TruVision Alternative Bank Risk Score
Although specific calculation details remain elusive, responsible banking habits are likely crucial:
* Limit bank account applications
* Avoid overdrafts and unpaid fees
* Pay off negative balances and fees promptly
* Use checks only when funds are available
* Jointly own bank accounts with trusted individuals with positive banking history
* Avoid opening joint accounts with those with negative banking records
Frequently Asked Questions
Q: How can I get a FICO credit score without an established history?
A: Open a credit card or loan for at least six months, or have an account reported to credit bureaus within that timeframe. Alternatively, become an authorized user on a loved one's credit card or apply for a secured credit card.
Q: What options are available if I'm denied a checking account?
A: Explore second chance accounts from banks and credit unions or utilize bank-issued prepaid cards.
Q: Which lenders use the TruVision Alternative Bank Risk Score?
A: TransUnion has not released a comprehensive list. Contact your lender to inquire about their usage.