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FICO Rules, but Other Options Remain
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Opening and closing credit accounts can have unexpected results, though, depending on where the accounts are and how many are closed or opened simultaneously. For more information, see Fannie Mae's consumer booklet "Taking the Mystery Out of Your Mortgage Loan" at http:/
ยท What if you have no credit history? Length of credit history counts for 15 percent of the FICO score, a big problem for the estimated 50 million people with little or no credit.
But a national credit bureau called PRBC says it is trying to change that.
Founder and chairman Michael Nathans said the goal is to help borrowers build credit files and credit history through payments they have made for rent, utilities and any other bill that's not reported to the major bureaus, including payday loans and remittances to family in other countries.
Though lenders are required under the Equal Credit Opportunity Act to consider these kinds of accounts, consumers often don't know that they can submit that information to supplement their FICO score, Nathans said.
PRBC, which started in 2002 in Annapolis as Pay Rent, Build Credit Inc., "operates as a credit bureau" under federal fair credit laws, Nathans said. A consumer with six months or more of what is called "nontraditional" credit can create a file using the PRBC Web site, http:/
PRBC does not charge consumers to set up a file or to view their own file. There is no fee for creditors to add information, and banks can electronically report customer payments at no charge.
The only fee, said Nathans, is if a borrower wants verification of previously paid bills. To verify rent payments costs $20, but borrowers need a minimum of six months of payment, Nathans said. To verify other "trade lines," such as payments for electric bills or cable bills, costs $15 each.
Borrowers seeking loans through Fannie, Freddie or the Federal Housing Administration need to show that they have paid their rent and three such trade lines for at least 12 months, Nathans said. That verification costs $65.
Nathans said CitiMortgage, Fannie Mae, Freddie Mac and the Ford Foundation have been early supporters. The National Association of Mortgage Brokers this spring agreed to educate its members about the service.
