Lenders are starting to realize the drawbacks of using traditional credit scores. According to Forbes, these reports fail to accurately assess how medical bills, income and other factors affect people's ability to pay.
But what other options do you have? Alternative credit reports include data related to your monthly bill payment habits and public records. Businesses are taking note of this: 8,500 organizations and counting use PRBC alternative credit reports to approve loans, lease equipment and more.
— My PRBC (@MyPRBC) September 12, 2016
How do you know if you have a good alternative credit score? Here are four habits that will register positively with PRBC:
1. You keep up with your rent
One of the many factors PRBC takes into account when calculating alternative credit scores is consumers' rent payment habits. We include it because it's a big financial commitment, and your ability to pay indicates whether you can handle loans for vehicles, electronics, furniture and other expensive goods. If you've always paid your landlord on the first of each month in full, your alternative credit score will benefit.
2. You pay your utility bills on time
If you never fail to pay the electric, water and gas companies their monthly dues, there's a chance you have a really good alternative credit score. No one likes having the power go out, much less have a company deliberately cut electricity to the house because of missed payments. Bottom line: Have no fear if you've payed your utility bills on time and in full.
3. You stay on top of loan payments
As mentioned, alternative credit reports also include information your loan payment habits. For example, if you took out an auto loan to purchase a used vehicle, PRBC will take note of the following details:
- The total value of the loan.
- The balance left on the transaction.
- Whether you've kept up with payments.
- If you've made a conscious effort to pay off the loan by paying more than the minimum balance.
The same process also applies to any mortgages, personal loans or installment loans you have in your name.
4. You've never been evicted
Your alternative credit report includes public record information that reveals whether you're a dependable, financially responsible individual. An eviction signals to landlords that you either missed rent payments, mistreated property or committed some other kind of wrongdoing. However, if you've always maintained good relations with your landlords, then you have nothing to worry about.
Does PRBC use the same scoring model as traditional credit solutions? Kind of. Instead of using a scale of 300 to 850 to rank your credit score, we'll assign you a number between 100 and 850.
One major difference between PRBC and traditional credit bureaus is that you can access your report as often as you want, free of charge. So, if you want a retailer to recognize your healthy bill payment habits, you can pull your report and provide it to them. If you want to know more about how to obtain your alternative credit score, click here.