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ALTERNATE CREDIT SCORE

Alternative Credit Score acts as one of the prime criterion for loan disbursement for an individual. Credit Score has positive co- relation with income.

Many individuals have thin or non-existent credit files. It indicates that giant U.S. credit bureaus don't have enough information about finances of many individuals and hence they are not assigned any credit score, a figure generated via statistical models that examine outstanding borrowing, history of payments and debt loads. Banks use credit scores to determine eligibility and pricing for mortgages, auto and other loans.

However, this group of people having proper income but devoid of necessary credit score is increasing in number which is no less significant and opportunities are opening up for them with extensive effort from the financial institutions who are developing credit values of these people on the basis of what is today popularly termed Alternate Credit Score. It runs parallel to regular credit scores, risk profiles are updated on the basis of diversified data like rent, utility, child care, medical, and other payments. Banks are also coming up in hurried pace to tap this un-trodden territory and it may see a sea change when lot of people will shift more towards banks and move away from high interest bearing payday lenders.

However due to lack of collective data and information of either parties with each other, there remains a vide gap of co-ordination and it may happen that many among the credit seekers fall in hands of several pay day lenders or may end up consuming several products that otherwise wont have a valid presence in their port-folio. One necessary point to remember is the appropriate data should be with the banks and the degree of authenticity is worth mentionable in this Alternate credit Score method.

Thanks

Pamela