Today, U.S. Representatives Jim Renacci (OH-16) and Keith Ellison (MN-05) introduced a bill to allow utility and telecommunications companies to report on time payments from customers to the three credit rating agencies.
"This is a common sense bill designed to help many Americans build or rebuild their credit ratings by simply doing what they already do -- paying their utility and cell phone bills on time," said Rep. Renacci. "One or two financial bumps in the road shouldn't leave hard working Americans struggling to repair an otherwise good credit history. Those who have yet to gain credit should be able to use all of the tools available to them to establish their credit worthiness. Credit reporting should work for consumers, not against them."
"Right now, tens of millions of Americans cannot rebuild their damaged credit history or build a more accurate score without taking on additional debt," explained Ellison. "Credit invisibility and inaccurately low credit scores cost consumers billions of dollars in high-cost credit. Inaccurate scores also hinder the economy as people cannot get loans for cars, college or homes. Our bill offers a no cost strategy to build household wealth and generate economic growth."
Today, as many as 50 million Americans are excluded from the mainstream credit system. This financial exclusion occurs because of a lack of credit information, not poor credit history. These "Credit Invisibles" have three or fewer payment histories in their credit files, and consequently are unscoreable. Furthermore, 50 million people could have higher credit scores if non financial payment data was reported to credit bureaus.
People who lack credit scores face significant economic harm. Lenders generally extend credit to those who already have it. Those with no or insufficient credit history are considered high risk, and are rejected when they apply for credit. People with no credit score also pay higher rates for car and homeowners' insurance. This legislation will also enable people to repair a damaged credit score easily, simply by paying their bills on time.
Also important to note: this bill would give utilities and telecom companies the ability to report on time payments. It would not, however, require them to do so.
Rep. Renacci is serving his first term in the U.S. House of Representatives, where he is a member of the Financial Services Committee. Prior to his election he worked as a Certified Public Accountant in the health care industry, and owned and operated over 60 other businesses in the automotive and sports management fields.