4 qualities of trustworthy alternative credit providers

Here are the details you need to look up when assessing alternative credit agencies.

Here are the details you need to look up when assessing alternative credit agencies.

Credit bureaus collect a lot of information about you. Every time you sign up for a credit card, make a payment on your loan or fall behind on monthly payments, the credit bureaus take note, developing reports that could hurt your chances of getting future loans.

Alternative credit providers work in a similar fashion to credit bureaus, the main difference being that they collect information on your monthly bill payment habits to develop what they call "alternative" credit scores. In addition, there are a select providers who are trustworthy. You just need to know how to find them. Listed below are four habits trustworthy alternative credit bureaus exercise: 

"PRBC collects your data only after receiving permission from you."

1. They ask your permission before collecting data
Unlike credit bureaus that keep you in the dark, alternative credit providers such as PRBC collect your data only after receiving permission from you. PRBC doesn't make a deal with your bank to collect your information without asking you first.

This is how it works: you create an account on PRBC's website, agree to the Terms and Conditions, and link whichever accounts you want to the service. You can connect to your utility, phone and bank accounts with just a few clicks. Your not obligated to provide information you'd rather keep private. 

2. They deliver consumer support 
Any topic regarding credit can be a bit confusing, especially if you have little experience with loans, credit cards and other such products. In addition, you may not know how to make the most value of your alternative credit report or convince lenders to accept it

Bottom line: Find an alternative credit provider that has your back. Look for companies that allow you to easily dispute errors, cancel accounts whenever you want to and call customer support at your most convenient time. 

3. They don't charge you for using credit reports
Traditional credit bureaus – Equifax, Experian and TransUnion – collect your data at no charge to them. They already make money selling reports to lenders, so why should they make you dole out money to receive a report? To add insult to injury, Equifax and TransUnion recently had to pay $17.6 million in restitution to consumers for misleading them into signing up for rolling subscriptions, according to the Consumer Financial Protection Bureau. How is that fair?

4. They jump through hoops to protect your data
Look for an alternative credit provider that takes security seriously. After all, they handle some pretty sensitive data. If you're not sure how to review alternative reporting agencies' ability to protect your data, here are a few security features they should employ:

  • PCI DSS 3.0 Compliance
  • Secure Socket Layer
  • Encrypted Credentials 
Find an agency that takes data security seriously. Find an agency that takes data security seriously.

5. They validate publicly available information 
A mistake on your credit report can set you back quite a bit. Some of these errors are huge, such as incorrect addresses or phone numbers. These types of mishaps could lead credit bureaus to mistake you for someone else. What if that "someone else" doesn't keep up with credit card payments? This could cause your score to drop.

Bottom line: Look for an alternative credit agency that goes above and beyond to ensure your public information is correct. Speak with one of their representatives and ask them how they validate information. 

So here's the real question: Will lenders actually accept your alternative credit report? There are a number of steps you should follow if a business rejects it. Arm yourself with that knowledge, and you'll be good to go.