FILE PHOTO: A JPMorgan Chase & Co building is shown in Irvine, California, United States on January 24, 2017. REUTERS / Mike Blake
May 18, 2021
(Reuters) – JPMorgan Chase & Co, Wells Fargo, US-Bancorp and other banks plan to exchange data on customers’ deposit accounts to lend to people who have traditionally been denied credit, the Wall Street Journal reported.
The plan, which is part of a government-backed initiative, will take into account information from applicants’ checking or savings accounts with other financial institutions to increase their chances of getting approval to get credit cards, the report said on Thursday, citing to people familiar with the matter. (https://on.wsj.com/3w3L6fK)
The move is aimed at customers who don’t have credit scores but are financially responsible, the report says. Lenders would consider applicants’ account balance over time and their overdraft history.
The banks did not immediately respond to Reuters’ requests for comment.
Banks are discussing the use of credit bureaus such as Equifax, Experian PLC and TransUnion, as well as fintech firm Early Warning Services LLC, for this data exchange, the WSJ report said.
The new plan is in marked contrast to the strategy that lenders generally follow, which traditionally relied on credit scores to determine eligibility for a loan. Credit reform is one of the many priorities for U.S. President Joe Biden as he seeks to repair the financial turmoil caused by the COVID-19 pandemic.
(Reporting by Niket Nishant in Bengaluru; Editing by Amy Caren Daniel)
This article originally appeared on www.oann.com