TransUnion has long been a proponent of improving credit visibility through the use of alternative data, such as cell phone and utility bills, in consumers’ credit history, so that lenders can have a fuller picture of their financial standing. This is a key component to elevating more than 60 million credit-invisible people — those who would not qualify under traditional credit evaluations — to new opportunities that would otherwise be unavailable to them.
As a veteran, I am proud to see the recent introduction of legislation that would require the incorporation of alternative data to help more veterans get access to housing loans and credit. As a result of serving, many veterans may have put off major purchases, such as a house or car, which would build their credit history. Alternative data allows other information to be considered as they enter civilian life. With all that these brave veterans sacrifice for their country, it’s important that we eliminate barriers that could prevent them from beginning the next chapter of their lives when they return from service.
The Building Credit Access for Veterans Act, introduced by Senators Tim Scott, R-S.C., and Richard Blumenthal, D-Conn., entails that the U.S. Department of Veterans Affairs (VA) adopt a more efficient, modernized process for incorporating alternative data into its current evaluation system. While VA policy already allows lenders to use some alternative data, the current system is outdated, creates significant delays for those who use it and puts the burden on veterans to take extra steps to establish their credit worthiness. Our veterans deserve to have this process go as smoothly and comprehensively as possible without the added responsibility put on them. The bill also requires the VA to develop new guidelines for including alternative data for private lenders working with veterans on loans, creating more access points for them.
The inclusion of alterative data in individuals’ credit history aligns with TransUnion’s goal to ensure as many Americans have as strong a financial foundation as possible. By doing so, more people have an entry point to get a loan or access credit for themselves, their family or their household. Our veterans deserve our gratitude, and this is just one way we can repay them for their service. TransUnion is eager to see our service members benefit from alternative data. We fully support this legislation and look forward to continuing to work with Congress to expand these credit health enhancements to all Americans.