A number of large financial instutitions (JPMorgan Chase, Wells Fargo, U.S. Bank) have agreed to share data on customers deposit accounts. The aim is to be able to extend credit to individuals without credit scores but are financially responsible and is part of a government back initiative (Project REACh, or the Roundtable for Economic Access and Change). It will looked at consumers overdraft history and their balances over time.
In 2018 credit scoring company FICO introduced the UltraFICO score that is based on checking history and includes factors such as: Current checking balance, Length of checking history, Transaction frequency, Overdraw history. Individual financial institutions have been using their own customers deposit account data to help in lending decisions, with JPMorgan being able to approve an additional 700,000 credit cards. Under this new pilot program that information will be shared between lenders.
Hat tip to WSJ
