Utility Payments as Alternative Credit Data: A Reality Check

Many individuals outside the credit mainstream are unable to access credit, or credit at competitive rates, because of the lack of traditional information, such as mortgage and credit card payments, available on their credit files. However, the recent report by the Political Economic Research Council and Brookings' Urban Markets Initiative "Give Credit Where Credit is Due" provides evidence that the inclusion of alternative data on credit-like payments, such as utility payments, in credit reporting can help bridge this information gap. The first step toward filling this gap requires utility companies to systematically report these data to the major credit bureaus. This report offers some initial insights into the possibility, experience, and hurdles of data reporting for utility companies.