As a part of her plan to address the homeownership gap for black families in America, Democratic presidential candidate Kamala Harris has proposed an amendment to the Fair Credit Reporting Act that will require credit reporting agencies to include rent, cellphone, and utility payments when calculating consumer credit scores. 

The Consumer Financial Protection Bureau has reported that an estimated 26 million people in America are “credit invisible,” meaning they do not have records maintained by the nationwide credit reporting agencies. In addition, an estimated 19 million people have “unscorable” credit files, meaning they contain insufficient credit histories to generate a credit score.   

At the 25th Annual Essence Festival held in New Orleans earlier this month, Sen. Harris discussed these discrepancies and her plan to “give black families a real shot at home ownership” and “remove the barriers that black Americans face when they go to qualify for a home loan.” Harris’ plan seeks to increase access to credit for those with a limited or “invisible” credit history because they do not have traditional credit-building accounts. 

The traditional Fair Isaac Corporation, or “FICO,” score – one of the most widely used and influential credit scores – focuses on payments of debts such as credit cards, auto loans, and mortgages. FICO has an alternative data collection system in place that includes data such as telecommunications and utility payments. However, this data is generally not gathered by the three major credit reporting agencies – Experian, Equifax, and Trans Union. As noted by by Joanne Gaskin, Vice President of scores and analytics at FICO, in a recent interview, “Today, we have a voluntary system of furnishing data which means not all providers report payment information to the CRAs.” 

Troutman Sanders will continue to monitor proposed amendments to the Fair Credit Reporting Act and other updates affecting the credit reporting requirements of financial institutions.