Going forward, you may no longer need a credit score to qualify for a credit card. JPMorgan Chase, U.S. Bank, Wells Fargo and other major credit card issuers have announced a new pilot program to make it easier for consumers without a credit score to be approved for a credit card.
Banks plan to share checking and savings account information to develop an alternative way to evaluate the applicant’s creditworthiness. Instead of focusing on past dealings with creditors, card issuers would address to the applicant's bank accounts to assess their financial responsibility. If the applicant doesn't have a credit score but has no overdrafts or returned checks on their checking account, that could improve their chances of being approved for a credit card.
The new pilot program, which is planned to be launched later this year, will allow banks to exchange information so that borrowers do not need to apply for a card at the same issuer, where they have a bank account. Banks are also discussing potential partnerships with financial data aggregators to consider the applicant's rental history and utility payments in credit applications.
For consumers, a clear edge is that they can get access to a traditional credit card that was previously very difficult to obtain. For banks, this new method of checking the consumer’s banking activity will open the door to plenty of new customers. Those who are credit invisible can now have a line of credit in their name. They will also have a credit report now and be on their way to building a credit score.
If you do not have a credit history and do not have time to wait for the pilot program to be available to you, you can consider some options that are available to people with no credit history.
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