Non-profit Cooperates With Credit Card Bureau to Help Small Business Owners Build Credit

Experian, one of America’s three major credit reporting agencies, has declared that it will work together with the Credit Builders’ Alliance (CBA) to help lower-income individuals - especially lower-income entrepreneurs - work on building their credit history. This will help the  lower-income small business owners borrow microloans from community organizations to qualify for bigger loans from mainstream financial institutions.

What are microloans? They are loans of much smaller-than-average sums of money to individuals who lack even the minimal resources to qualify for traditional loans, have already demonstrated their utility to lower-income individuals. Many microloan borrowers have used microloans from community lending organization to build wealth and escape from poverty.

Now, microloans promise to become more effective than ever before. CBA - a non-profit organization dedicated to collecting loan payment data from lenders servicing lower-income communities - intends to share borrowers’ microloan repayment histories with Experian. Already, over 3,000 microloans made by United States financiers, including Community Development Financial Institutions (CDFIs), have been collected in Experian’s databases.

Vikki Frank, the executive director of the non-profit Credit Builder’s Alliance is optimistic about this turn of events. Frank stated earlier today, “This partnership… is a great opportunity for micro-lenders to provide information to the credit bureaus and give small business owners a fair opportunity to build stronger credit profiles and…. access the formal banking system.”

Experian is the first of America’s credit bureaus to take this independent step towards helping lower-income individuals run their own businesses, obtain wealth, and participate more fully in the economy. Zaydoon H. Munier, the senior vice president of Marketing, Product and Data development for the Experian Group, said that Experian is “very pleased” with the decision that has been made.

Community lenders are also pleased. Emily Talley, senior director of community affairs at Capital One, reported that Capital one is “proud to support this initiative.”

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