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Home » Incomplete credit histories would reduce lender confidence
Policy & Issues

Incomplete credit histories would reduce lender confidence

March 29, 2022
Collections: Get to the root cause of delinquency

Limiting the reporting of certain debts would impact accessibility to credit, especially for low- and moderate-income borrowers, CUNA wrote to leadership of the Senate Committee on Housing, Banking, and Urban Affairs Tuesday. The committee conducted a hearing on the economic impact of medical debt.

“Any potential legislation designed to restrict the reporting or consideration of certain debts prevents lenders from seeing borrowers’ complete debt circumstances and clouds lenders’ ability to fairly assess borrowers’ creditworthiness,” the letter reads. “An incomplete view of borrowers’ credit history reduces lender confidence in credit reports and scores, impacting pricing decisions and credit availability.

The borrowers most impacted by the consequences of opaque credit report data will be low- and moderate-income borrowers whose financial well-being could benefit the most from access to affordable credit from a credit union,” it adds.

The letter further notes that medical debt can be a “significant weight on the financial well-being of some families,” and credit unions are positioned to help consumers experiencing financial hardships “get on a path to financial health.”

Credit Union Magazine: Winter 2022

Winter 2022

Credit Union Magazine’s Winter 2022 issue highlights data-driven marketing, the board’s role in cybersecurity, elder abuse scams, credit unions’ auto lending advantage, and more.
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