CHICAGO – Pay Rent, Build Credit Inc. (PRBC), a credit bureau that enables consumers to establish and build a credit history with rental payments – similar to what homeowners do with mortgage payments – introduced the PRBC Bill Payment ScoreT Release 1.0 and the PRBC AchieversT 100+ scale at the Local Capital Markets Investment Fund Institute. The institute was hosted by the Corporate for Enterprise Development at the Federal Reserve Bank of Chicago. PRBC Founder and CEO Michael Nathans described the new products as "important developments that are necessary to fairly consider `non-traditional credit' data in automated underwriting, application acceptance, and credit pricing decisions." He pointed out that a BPS or a composite BPS and FICO score could provide millions of Americans who have no FICO scores or low ones, with equal access to affordable credit and insurance, employment, and asset-based wealth through homeownership. Using a weighted scorecard approach, BPS allocates numerical points based on the timeliness of recurring payments made over the past 36 months. More points are allocated to larger payments such as housing (lease and mortgage), and fewer points to smaller payments such as utilities, phone, and cable service. Payments such as auto loans, credit cards, and child support score more than utilities and phone, but not as much as housing payments. According to PRBC, "BPS and PRBC Achievers 100+ scale represent an intuitive starting point for incorporating financial education, rental, bill payment, and regular remittance data into automated credit and insurance risk assessment. The average consumer can easily understand its simplicity and BPS reflects the achievement of a proven history of timely and consecutive bill payments using a weighted point system." Speaking at the institute, Nathans said, "It is common wisdom that to establish and build a good credit history, it is important to own a bank or credit union account and to pay all of your bills on time. Consumers who own a bank or credit union account, pay bills electronically, and who also successfully complete approved courses in financial literacy, home maintenance, and insurance receive `points' on PRBC's Achievers 100+ scale that lenders and insurers can use to assess risk and reward fiscal responsibility." PRBC stressed that "while BPS doesn't represent a statistically predictive score by itself, a BPS can be incorporated into FICO and other statistically predictive credit scoring models, or used in the absence of a FICO score, to construct application acceptance and pricing policies. It is planned that credit and insurance premium policies constructed around the use of a BPS will be studied, and adjusted for actual default and claim rates and loss severity over time. Inclusion in application acceptance and pricing decisions is expected to lead both PRBC data and the BPS to becoming statistically predictive, as `traditional credit' data, FICO and other credit scores have become today." -

[email protected]