Top TEN most frequently asked questions:
1. What is Alternative Credit and why is it important?
Any payment account that is not found in your Equifax*, Experian*, or TransUnion* credit report is considered “alternative” credit. Typically, property managers and landlords, utility companies, cell phone providers, insurance companies and many other types of businesses do not report their customer’s account information and payment history to the national credit bureaus. However, you are entitled under the Equal Credit Opportunity Act (ECOA) to present any alternative credit accounts for which you are responsible, to anyone who requires a credit check when your creditworthiness is being assessed.
Regardless of whether you have no credit file, a thin credit file, or a credit file with negative credit information, your alternative credit information may help you in many situations that require a credit check. If you have no credit file, or a thin credit file with no score, and you make on-time monthly payments, your alternative credit file may help you establish a payment history that you can present to any potential creditor. If your credit file contains negative payment information, your alternative credit file may help to offset those negative marks by showing the creditor a more complete picture of your credit history. Even if you have good credit, but only one or two accounts, your alternative credit file may further boost your overall credit profile by demonstrating across more accounts how conscientious you are about making timely payments.
2. How is my eCredable AMP Credit Report™ different from a consumer credit report from the three national credit bureaus?
For many consumers, up to 80% or more of their monthly bill payments are never reported to the national credit reporting agencies. As a result, they never get credit for the on-time payment history they have established. eCredable gives you a way to record these “alternative” bill payment accounts and have them included in your AMP Credit Report. Your verified report records the payment history of your monthly obligations such as rent, utilities, mobile phone providers, any insurance, child care, school tuition, personal loans and many others. Unlike a credit report from the three national credit bureaus where creditors report their customer’s credit information automatically, your AMP Credit Report contains only the bill payment accounts you choose to have verified and included in your report.
3. Does eCredable provide my information to the national credit bureaus?
No. eCredable does not report your information to Equifax, TransUnion or Experian. The account history contained in your AMP Credit Report will not affect an existing bureau credit report or bureau credit score.
4. How can an eCredable AMP Credit Report™ help me?
If you have little or no traditional credit and no credit score, an AMP Credit Report and AMP Credit Rating can help you show any potential creditor that you have a verified history of on time payments of your monthly financial obligations from sources that are considered mainstream throughout the financial industry.
If your credit file could use a little help, your AMP Credit Report may help to offset negative history, showing the creditor a more complete picture of your credit history by highlighting your verified history of on-time payments. Especially in today’s economic climate, bad things happen to good people. By using your AMP Credit Report to show a more complete credit profile, your creditor may better understand the circumstances which created that bad mark against your traditional credit file.
Your AMP Credit Report is presented in an industry standard format that creditors are familiar with. It can be used by the creditor in underwriting, and accessed electronically for credit scoring or other purposes. You are entitled to use your AMP Credit Report as a stand alone report, or as a supplement to the bill payments contained in your Equifax, Experian, and TransUnion credit reports; and by law, a creditor must consider your AMP Credit Report on your request.
5. Why is it important to have the bill payment information contained in my eCredable AMP Credit Report™ verified?
Bill payment history that is not voluntarily reported by the account holder, does not reside in a database at the major credit bureaus in the same way that traditional credit does. For that reason, creditors need to know that the alternative credit information they are reviewing has been authenticated by a trusted verification source. The bill payment accounts that you include in your AMP Credit Report must be compiled and verified by a credit verification company for the creditor to accept them for consideration.
It is very important for anyone reviewing your AMP Credit Report to know that the information it contains has been verified by a source they are familiar with, and that it meets industry best practice standards for accuracy and authenticity. That is why eCredable has partnered with one of the premier credit reporting and verification companies in the country to conduct the investigation and verification of all bill payment account history. eCredable’s verification partner is a member of the National Consumer Reporting Association (NCRA). Their verification staff is Fair Credit Reporting Act (FCRA) certified, and all verifications meet or exceed the guidelines of the government sponsored entities, Fannie Mae, Freddie Mac, HUD and FHA. Our verifier is well known in the financial industry, and provides a variety of credit related products to thousands of banks, credit unions, mortgage lenders, finance companies, landlords, property managers, and other financial institutions who regularly check consumer credit.
6. Do all creditors use Alternative Credit information?
By law, all creditors must consider Alternative Credit information when presented to them, if they use a credit report in assessing the creditworthiness of their applicants and customers. Government sponsored entities such Fannie Mae, Freddie Mac and FHA readily recognize the importance of Alternative Credit information. Many Credit Unions also readily recognize Alternative Credit information as a valuable asset in assessing their member’s creditworthiness. Other major financial institutions and service providers weigh Alternative Credit information in their lending process. It is important to know that by law [ECOA Section 202.6(b)(6)], and upon your request, all creditors using credit information to evaluate their applicants must take the information contained in your AMP Credit Report into consideration.
7. What does the law say about Alternative Credit information?
Section 202.6(b)(6) of the Equal Credit Opportunity Act (ECOA) is a Federal law, enforced by the Federal Trade Commission (FTC) that states:
To the extent that a creditor considers credit history in evaluating the creditworthiness of similarly qualified applicants for a similar type and amount of credit, in evaluating an applicant's creditworthiness a creditor shall consider: (i) The credit history, when available, of accounts designated as accounts that the applicant and the applicant's spouse are permitted to use or for which both are contractually liable; (ii) On the applicant's request, any information the applicant may present that tends to indicate that the credit history being considered by the creditor does not accurately reflect the applicant's creditworthiness; and (iii) On the applicant's request, the credit history, when available, of any account reported in the name of the applicant's spouse or former spouse that the applicant can demonstrate accurately reflects the applicant's creditworthiness.
The law in effect says creditors considering your credit in evaluating your creditworthiness, must take into consideration any payment accounts for which you are responsible, if you present the information to them.
8. What is the AMP Credit Rating™, AMP Credit Rating™ Simulator and AMP Rate Watch?
The AMP Credit Rating is a statistical rating model developed exclusively by eCredable to rate the payment history of all current verified accounts in your eCredable AMP Credit Report. The rating ranges from A (the highest rating) to F (the lowest rating.) The AMP Credit Rating rates your historical bill payment behavior, and can give anyone considering your AMP Credit Rating a useful tool to assist them in evaluating your creditworthiness.
The AMP Credit Rating Simulator is a free tool provided by eCredable designed to help you understand what your AMP Credit Rating might be after your bill payments have been verified. The simulator will also give you a general idea of how your AMP Credit Rating will be affected as you add or delete bill payment accounts, and add or delete late payments. The AMP Credit Rating Simulator cannot tell you exactly what the rating will be on your verified AMP Credit Report, but it allows you to consider, “What if I add my cell phone to my rental and two utilities,” or, “What if I add a second utility payment that has a late payment 9 months ago” and get an estimate of what your rating might be under those scenarios.
AMP Rate Watch is a free tool that provides an estimate of your AMP Credit Rating whenever you log into your eCredable account. The estimate is based on the monthly payment updates you provide for your bill payment accounts. AMP Rate Watch allows you to plan and track your progress toward achieving your AMP Credit Rating goal. Monthly email updates tell you exactly where your estimated rating is so you can easily monitor how you are doing.
9. What is the difference between a credit score and the AMP Credit Rating™?
There are several major differences between a credit score, such as the FICO* score or one of the credit bureau scores, and the AMP Credit Rating. First, a credit score is calculated only on credit information reported to the national credit bureaus by an individual’s creditors. The AMP Credit Rating is calculated on an individual’s current verified bill payment information, contained in their AMP Credit Report, which is not reported to the national credit bureaus.
Standard credit scores are primarily a measure of debt and how responsibly that debt is paid. They are designed to gauge the likelihood that you will default on the repayment of the debt. The AMP Credit Rating is not a measure of debt. It is a measure of how responsibly your alternative financial obligations (i.e. your monthly living expenses) have been paid. Because the rating model does not consider debt, having higher payments for bill payment accounts, such as rent and utilities, does not have a negative effect on your rating.
For the same reason, having many bill payment accounts, instead of just one or two, will not have a negative effect on the rating as it can with a traditional credit score. Quite the opposite, the more current verifications being measured by the AMP Credit Rating model, the higher the rating may be. Of course, the accounts must show a pattern of responsible payment history to have the most positive effect.
A credit score can be negatively affected by actions that result in creditors and other types of companies checking the individual’s credit, commonly known as a credit “inquiry.” Actions like shopping for a new loan or credit card, requesting an increase in a loan or credit card, or by opening or closing accounts, may generally result in the bureau credit score going down. The AMP Credit Rating is not negatively affected by this type of behavior. Because the primary types of bill payments that make up a credit rating are not debt based accounts, the most important considerations in calculating the rating are more about the types of accounts a person has, how many months of credit history they have, and how responsibly they make their payments.
One of the biggest differences between credit scores and the AMP Credit Rating is how “transparent” the model is. The way credit scores are calculated is generally a bit of a mystery. At eCredable, we want people to understand how the AMP Credit Rating works, and what it takes to get from a lower rating like a C or a D, to an A. That is why we have designed the AMP Credit Rating Simulator, so that every eCredable member who does not have an A rating can learn how to improve their financial standing over time, and achieve their financial goals for themselves and for their families.
10. Is my personal information secure?
The safety of your personal information is of the utmost importance to us. eCredable maintains physical and procedural safeguards designed to protect the confidentiality of your personal information, and to comply with the highest level of physical and internet security standards. In addition to eCredable’s strict security policies and ID verification procedures, eCredable uses Secure Socket Layer Encryption (SSL) whenever sensitive information is sent or received. This provides the same level of security used by banking institutions and other on-line companies requiring the utmost protection for their customers.
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