JPMorgan is among large U.S banks in a government-backed plan to offer credit to people without credit scores according to the Wall Street Journal. The banks plan on sharing information on customers’ accounts data with other financial firms to establish their suitability for credit card approval.
10 banks, which also include Wells Fargo and U.S Bancorp., have agreed with the plan which is expected to be extensive and more organized.
Financially responsible people who lack credit scores are the targets in the move.
A decision shall be made after analyzing account balances of an individual over a period of time as well as overdraft history.
For a long time, credit scores and credit reports have been the determinants of getting a loan and the move could bring changes to approval strategies of big banks.
Many adults in the U.S are limited to payday loans and costly forms of credit with almost 53 million lacking credit score.
Banks have in the past thought of ways to approve credit to borrowers with less or no credit history though it has been on a small scale and only with specific companies.
JPMorgan, Wells Fargo, and Bancorp stocks are currently gaining, JPM: NYSE is up 2.38% WFC: NYSE is up 1.34% USB: NYSE is up 1.93%
