HACKENSACK, NJ (Bergen County) – U.S. Congressman Josh Gottheimer (NJ-5) announced Tuesday two new bipartisan bills to fix two significant pillars of our credit system in the United States that are in dire need of an upgrade: how credit scores are calculated and how our credit is reported.
Gottheimer’s Accurate Access to Credit Information Act will create a single, easy-to-use portal providing free access to a credit score and all three major credit bureau reports, with the ability to identify errors and initiate disputes, lift security freezes, and information on who has accessed your report over the prior two years. The Credit Access and Inclusion Act will grant consumers the power to opt-in to include their rent and telecom payments as data sources when creating a credit score.
According to the Federal Trade Commission, 21 percent of all consumers had verified errors in their credit report. These factors directly impact a family’s ability to get a loan to start a small business, lease a car, be approved for a mortgage, or determine the APR to pay on a credit card.
Gottheimer noted that both credit reports and scores, and their accuracy, play a huge role in determining a consumer’s financial health and that a lack of credit history can disproportionately affect minority and lower income communities. African-American and Hispanic families are denied credit more often than white families with the same income.
“Not only do both your credit report and credit score decide your ability to obtain credit at a fair price, but they’re also used by countless sectors, from insurance companies to landlords and even employers to decide if you’re welcome or not. Without a sufficient credit history, or file, as it’s called, consumers face incredibly difficult barriers to accessing credit or they face exorbitantly high costs. On top of that, this issue, unfortunately, disproportionately impacts consumers who are African-American or Hispanic, and people who live in lower-income neighborhoods,” Gottheimer said.
According to a 2015 study, approximately 26 million people are credit invisible, meaning they have no credit history at any one of the three national credit bureaus.
“Traditionally, you build your credit through a credit card, a car loan, and a mortgage. But times are changing, especially for millennials and the newly banked. We are seeing more Americans rent instead of own, Uber and Lyft instead of lease a car, and use debit cards or Venmo instead of a credit card. In this new era, there needs to be a better way to create a comprehensive picture of a consumer’s creditworthiness – to add to their credit file – even if they don’t use the traditional sources of the past,” Gottheimer said.
“These two bills will be transformative for the 24 million Americans who are underbanked, and an additional 8 million who are not even connected to the banking system. These bills will open up access to opportunity for so many low income Americans who work hard every day, but because current consumer credit reporting agencies are not looking at their solid earning and payment histories, their credit scores do not reflect their true, responsible, earning and payment capacity. This legislation holds the promise of bringing millions into the mainstream banking system,” said Greater Bergen Community Action President and CEO Robert F. Halsch, Jr. “This is good for families, good for communities, and good for the economy.”
“Credit reports and scores play a critical role in the life of any consumer,” said Phyllis Salowe-Kaye, Executive Director of New Jersey Citizen Action. “But under-regulated Consumer Reporting Agencies too often report inaccurate credit scores that can cost anyone thousands of dollars in higher-priced credit, or result in the denial of a job, insurance coverage or an apartment rental. The Accurate Access to Credit Information Act will bring badly needed transparency and accountability to the credit industry, while the Credit Access and Inclusion Act will give consumers the chance to improve or repair their credit through expanded data used to measure responsible payment histories. We urge more legislators to back these bills which will bring financial stability to many New Jersey families. We thank Congressman Gottheimer for his leadership on this important issue. These bills will ensure consumers are treated fairly by the credit reporting system while giving many the opportunity to boost their scores and repair their credit. This is a good thing.”
“This is valuable legislation that provides an opportunity for working families, the poor, the formerly incarcerated, and for young people who seek to develop a credit history outside the traditional market. Traditionally, rent, cell phone bills, and other payments haven’t been included in these calculations. This is a seismic shift in giving people access to the American Dream and I thank Congressman Gottheimer for leading this charge,” said former New Jersey Governor and Chairman of the Board for the non-profit New Jersey Reentry Corporation.
“I want to thank Congressman Gottheimer for introducing this critical piece of legislation. We know that minority communities are denied credit more often than white communities with the same income. This legislation takes a huge step towards providing opportunities to access credit and to build credit through non-traditional means,” said NAACP Bergen County Chapter President Jeff Carter.
“The most important legislation, in my opinion, out of the two is the Credit Access and Inclusion Act. Allowing people to include their rent and telecom payments is a big win for the working people in our District. Not everyone can take a loan out with favorable interest rates if you don’t have credit to begin with, and this is especially true with new immigrants and minority communities,” said Bergen County Freeholder Chairwoman Germaine M. Ortiz.
“Success in today’s world is driven more and more by someone’s credit score. With these two bills, millions of Americans will be able to improve their credit and take another step towards achieving the American Dream,” said Bergen County Freeholder Vice Chairwoman Mary J. Amoroso.
“In my community, credit is critical. A lot of the jail population looks like me. When they come back to the street. they can’t find a decent place to live or a decent job. The most critical part is credit and access to credit,” said NAACP Bergen County Chapter Vice President Nathaniel Briggs. “It’s great that the doors are being opened to access credit and I thank the Congressman for introducing these bills.”
“The good thing that Congressman Gottheimer is doing is allowing people to opt-in and participate in the financial landscape of America,” said NAACP Bergen County Chapter Economic Development Chair Randy Glover. “As a member on the Executive Board of the NAACP, that’s one of the things we stand for. We stand for inclusion and for bringing people together and working together so we can have a better society and a better America.”
The Accurate Access to Credit Information Act:
- Creates a single, easy-to-use portal that gives consumers unlimited free access to all three of their major bureau consumer reports.
- Provides the ability to easily identify errors and initiate disputes, tools to lift and remove security freezes, information on who has accessed their report over the prior two years, and provide a credit score.
- Places all these tools in one simple place, with one secure log-in, with unlimited access, for free, forever.
The Credit Access and Inclusion Act:
- Provides consumers with the power to opt-in to include their rent and telecom payments as data sources when creating a credit score.
- Helps consumers with little or no credit history – those without traditional credit lines like mortgages, car loans, and credit cards – to create a more accurate and comprehensive picture of their credit.