A credit score affects virtually every aspect of a person’s financial life—from buying a home or starting a business to the interest rate on credit cards. Credit checks are also used to screen applicants for rental housing, bank accounts, and jobs. Yet roughly 40 million people have either no credit files or “thin” files that make them “unscoreable,” and approximately 45 million more have low scores.* People with good credit ratings pay about $250,000 less in interest throughout their lives than those with poor ratings—savings that could go toward building assets.

Nonprofits, such as micro-enterprise development and first-time homebuyer organizations, offer loans to low-income, poor-, thin-, or no-credit-file consumers, to help these consumers build credit and assets. However, many nonprofits and other small lenders cannot report their loan repayment data to the three major credit bureaus—Experian, TransUnion, and Equifax—because they face barriers such as small portfolio sizes or the high cost of credit reporting (i.e., technology, compliance, know-how).