New Government-Backed Initiative Aims to Help Consumers with No Credit Score Get Approved for Credit Cards

Strategic Insights -

A significant number of Americans lack a credit score, which can make it difficult for them to obtain credit cards or access other financial services. However, a new government-backed initiative, supported by several major banks, may soon provide a solution. Under this program, credit card applicants without a credit score can still be approved for a credit card by sharing their deposit data from their checking and savings accounts. This approach is a departure from the traditional credit score-based system and may help millions of Americans who currently lack access to credit.

Key Takeaways:

  • JPMorgan Chase, Wells Fargo, U.S. Bancorp, and seven other banks are participating in a government-backed initiative to extend credit to consumers without a credit score.
  • The program will allow lenders to review applicants' deposit data from their checking and savings accounts to determine their creditworthiness.
  • Applicants without a credit score who are deemed financially responsible may be granted a credit card after a lender reviews their banking account balances and overdraft histories.
  • The initiative is part of a pilot program expected to launch this year.
  • An estimated 53 million adults in the U.S. lack a credit score, which can make it challenging for them to access credit and other financial services.
  • The new program involves data sharing with credit reporting firms Equifax, Experian, and TransUnion, as well as Early Warning Services, which oversees Zelle.

Statistics:

  • 53 million adults in the U.S. lack a credit score, according to Fair Isaac Corp.
  • The new program aims to provide credit access to those who typically would not be able to open a credit card.
  • JPMorgan Chase, Wells Fargo, U.S. Bancorp, and seven other banks are participating in the initiative.

Sources:

  • "Are Credit Card Rewards Taxable Income?: Man Taxed $310,000 Bonuses | IBTimes" ()
  • "JPMorgan, Others Plan to Issue Credit Cards to People With No Credit Scores" (http://www.wsj.com/articles/jpmorgan-others-plan-to-issue-credit-cards-to-people-with-no-credit-scores-11620898206?mod=latest_headlines)
  • "More Companies Paying COVID-19 Vaccines: JPMorgan Chase, Wells Fargo, BofA, More" ()
  • "JPMorgan, Wells Fargo, US Bancorp, credit cards for people with no credit scores" ()