Design your own credit report from scratch using this new tool from Experian

Consumers invisible to banks thanks to America’s enigmatic credit-reporting system have a new tool at their disposal: Experian, one of the big three credit bureaus, is introducing a new program that will allow consumers to simply create their own credit reports from scratch, the Wall Street Journal reports.

The program, called Go, will involve customers linking “recurring nondebt bills” (think cell phone payments, utility bills, or even bank accounts just generally) to provide the foundation on which to build a credit score. The process is aimed at converting consumers from being invisible to banks to having a credit record and an increased chance of loan approval. Starting in 2018 and 2019, Experian and other credit-reporting agencies began allowing consumers who already have credit reports to boost their scores by adding extra information of their choosing—mostly the above items, like utility payments and phone bills. Experian said last year that this pivot has collectively added 50 million more points to Americans’ credit scores in the past three years.

This makes Experian the first credit bureau to allow everyday cashflow data to be used as an on-ramp for building credit. The Consumer Finance Protection Bureau (CFPB) estimates this is a hurdle to more than 25 million “credit-invisible” Americans. This a group that struggles to get credit scores, and it includes everyone from recent graduates and people who intentionally shun credit cards, to immigrants, and even many Black and Hispanic adults. To get a loan, you need a good credit score. But to have a good credit score, you need proof you can repay credit. That proof has traditionally come from information supplied by lenders—data revealing what types of debt a consumer has applied for, and how often, and whether that person pays it back on time. Experian’s Go gives the “credit-invisible” demographic a way to establish a credit record, increasing their chances of loan approval.

Experian rolled out Go back in October, through a targeted pilot with about 15,000 people. It says consumers who created new Go accounts by adding nondebt accounts of their choosing were able to go from having no FICO score to an average of 665, which is near the range generally considered to show good credit.

But of course the move also comes with a benefit for Experian: Go also gives it access to more consumer data than is available to the other credit bureaus, making it attractive to lenders that want to buy credit reports, and creating new leads it can sell that might result in new credit card openings. This tactic of pushing additional lines of credit or financial services on customers has been controversial in the past, given this demographic’s economic vulnerability. The Journal says Experian plans to pitch new Go consumers credit cards that they’re likely to be approved for. Among the specific cards mentioned are ones from Capital One and also by a new fintech startup called Petal that specializes in lending to consumers with limited credit histories.