Experian Go, a tool to build your own credit report

A major change came to credit reports in the U.S. in early 2022, and it promised to benefit millions of consumers.

The Wall Street Journal reported Jan. 25, 2022, that Experian, one of the major credit bureaus, planned to introduce the ability for consumers who don’t have credit reports to create their own from scratch.

American consumers normally rely on Experian and the other two credit bureaus, Equifax and TransUnion, to create their credit reports. These reports contain financial data that helps credit card issuers and other lenders determine whether to approve a consumer’s application and what the terms will be, such as the interest rate.

Now, Experian has rolled out what you might call a DIY credit report. This new program lets consumers take control of their credit in a way they have never been able to before.

Who can benefit from a DIY credit report?

About 28 million American adults lack credit reports and, therefore, credit scores, according to Experian. So-called “credit invisibility” disproportionately affects Black and Hispanic adults, as well as immigrants, low-income people and those under age 25, Experian says.

Because they don’t have credit reports and credit scores, this estimated 28 million are often forced to rely on high-interest lending options, such as payday loans and title loans, because they’re shut out of better alternatives like traditional credit cards and bank loans.

Lenders provide much of the data contained in credit reports, so credit invisible consumers often don’t have enough of a traditional financial history to generate one. Payday lenders and other lenders this group might lean on generally don’t report payment history, balances and other account details to the major credit bureaus.

In recent years, some credit bureaus and credit-score providers have begun to allow consumers to self-report their payments of rent, utilities, cellphones and similar bills. But those efforts are designed to boost consumers’ credit scores, meaning the data isn’t used to form the foundation of a credit report.

With this mind, you should know that Experian Go can benefit the following populations:

• “Unbanked” individuals and families who avoid traditional banking products due to their lack of credit history
• Minority populations who have felt “shut out” of the traditional banking system in the past
• Those under the age of 25 who have not started building credit history yet
• Immigrants who have not yet had the opportunity to build credit history through traditional means

Experian Go: What to know

Experian’s new offering, known as Go, allows consumers to connect recurring non-debt payments to their newly created credit reports, according to The Wall Street Journal. This enables them to establish a credit record that credit card issuers and other lenders can use to determine their eligibility for a lending product.

Experian started testing the Go program in October of 2021 with about 15,000 consumers, WSJ reports. On average, Experian executives told the newspaper, consumers who added non-debt accounts to their DIY credit reports went from having no credit score to having a FICO score of 665.

FICO, a major supplier of credit scores, defines 665 as a fair credit score. A FICO score ranging from 670 to 739 is considered a good credit score, meaning the odds of being approved and getting attractive terms for a credit card (or other lending product) are greater than for someone with a fair credit score.

Bottom line

In the evolving effort to broaden the visibility of credit invisible consumers, Experian’s Go program can boost the chances for many more Americans to qualify for traditional credit cards and other mainstream lending products.

Ultimately, this can help individuals pay lower interest rates and fees each time they borrow money, while they build credit history that can serve them in other areas of their lives. Fortunately, Experian Go is absolutely free to use and open for enrollment.