The financial difficulties experienced by many people today due to the economic crisis is the ultimate reason for the services of cash advance lenders. Because most of these payday cash advances are short-term and due within two weeks, many of these consumers are unable to comply with their obligation. They make payment defaults and ruin their credit scores.
Having low credit scores is detrimental. Consumers who are looking for more favorable loan terms are unqualified to apply for these loans. They may also be deprived of some benefits that require higher credit scores. The Community Financial Services Association of America or CFSA has created a program to help payday cash advance borrowers build credit through a new credit reporting agency that tracks their loan payments at no extra cost.
With over 164 affiliated cash advance lenders and financing companies, CFSA helps consumers find financial freedom by inproving their credit scores. How can they do this? The CFSA has partnered with PRBC, a consumer credit reporting agency, also called the credit bureau which is similar to the other four U.S. credit bureaus (Equifax, Experian, TransUnion and Innovis). In contrast to these popular and established credit bureaus, PRBC allows their consumers to self-enroll and report their payday cash advance payments and other debt payments. Consumers can also report payments for bills such as rent, utilities, cable, telephone, and insurance that are usually not reported to the other bureaus. Timely payments will help increase your credit score.
Billy Webster, CFSA board member, has been very proud of this program. He said, “More than 50 million Americans have low or non-existent credit scores, denying them the opportunity for equal participation in the mainstream economy. I am delighted that through this initiative we can help our consumers build their credit history.”
Today, traditional credit reporting agencies do not track or consider the payments for bills such as rent, private mortgages, utilities, telephone, cable TV, and child care for computing credit scores. So, people who make timely payments on bills, but not on loans or other financial products, are deprived of affordable home loans, auto loans and insurance. Sometimes, your credit score may affect getting employment or the amount of the deposit required for new utilities.
So how does PRBC works? PRBC services track payments of payday cash advances and other recurring bills by producing a Bill Payment Score or BPS which can be used to supplement a traditional credit score. The BPS is designed in such a way that consumers can easily understand the terms and the contents. Please take note that PRBC is free and does not charge a consumer for enrollment into the service or to view their own data.
The creation of the PRBC is answer of payday lenders to the summons of the federal government. For several years, the U.S. Congress has been proposing legislation on how to help consumers get out of debt and being the prey of payday lenders. Before the actual formation of the PRBC, State Representative Susana Mendoza, proposed in a hearing of the House Subcommittee on Financial Institutions and Consumer Credit, to require payday lenders to include credit reporting and find an alternative data source to help consumers build their credit histories.
With the creation of PRBC, she said in an interview, “I am thrilled that CFSA recognizes the need, not just to help payday cash advance consumers get by financially, but to help them get ahead. That was the goal of my legislation, and I’m delighted to see CFSA put the idea into action.”
The creation of the PRBC services, through the initiative of CFSA, helps consumers of payday cash advances to achieve financial freedom. In fact, it has the strong support of consumer advocates as iterated by William McNary, the Co-Director of the Citizen Action in Illinois, “Through this initiative consumers who lack the opportunity will now be able to start to build a credit history. We appreciate the industry’s commitment to continue to improve their service.”