The Biden Administration Is Looking To Change how Credit Scores Work in the United States
If you’re looking to take out a loan in the future, there’s a good chance that your credit score is going to play a role. Did you know that there is a chance that the credit industry may change in the near future? With the new administration in the White House, the Biden presidency is looking to change how the credit industry operates. Right now, there are three major credit companies in the United States. Equifax, Experian, and Transunion act as black boxes. They gather, organize, and sell data on their consumers. Then, they issue grades on our financial behavior without revealing how scores are calculated. Furthermore, there are concerns that the credit industry is exacerbating existing racial disparities as they work.
The Prospect of a Public Credit Reporting Agency
In the eyes of many financial experts, the answer might be a public credit reporting agency. Already, Joe Biden has announced that he has adopted a proposal to create a public credit reporting agency. The goal is to create a new publicly run credit reporting agency within the Consumer Financial Protection Bureau (CFPB). Over the next few years, the goal is to eventually phase out the current credit industry in the United States, which is for profit. The goal is to run an agency that is steered by the needs of consumers instead of Revenue generation.
Credit Scores Have a Major Impact on the Everyday Lives of Americans
Supporters of this plan are pointing toward the massive impact that credit scores have on the everyday lives of Americans. Those who do not have positive credit scores (as calculated by for-profit credit bureaus) may end up paying significantly higher interest rates when they apply for home loans or car loans. Or, they might be denied a loan entirely. In some situations, a poor credit score may make it harder for someone to get a job as well. Therefore, it is important to take a look at how the current credit system can be improved.
Invest in Professional Credit Repair Services
Regardless of whether the future of the credit system is for-profit or publicly run, it is important for everyone to think about how they can fix credit. By investing in professional credit repair services, individuals can increase their ability to compete for the best interest rates possible when they apply for a loan in the future. Furthermore, a positive credit score may make it easier for someone to compete for a popular job offer.