Exciting News for the Credit-Invisible: TransUnion’s TruVision Alternative Bank Risk Score
Over 60 million adults in the U.S. currently live without a credit score, and that’s a daunting statistic considering how much access to credit is tied to creditworthiness. However, recent advancements from TransUnion offer a glimmer of hope for those who lack traditional credit histories. Their new product, the TruVision Alternative Bank Risk Score, promises to help individuals build a credit score based on their banking habits.
What is the TruVision Alternative Bank Risk Score?
Unlike traditional credit scores that rely heavily on debt usage and repayment history, the TruVision score considers your banking history. This means that factors like how you manage your checking and savings accounts now play a role in determining your creditworthiness. Even if you’ve never owned a credit card or taken out a loan, your banking practices might still earn you a score.
As Liz Pagel, Senior Vice President of Consumer Lending at TransUnion explains, “The TruVision Alternative Bank Risk Score provides a balanced view by incorporating both positive and negative banking data.” This shift is significant—not just for individuals but also for promoting overall financial inclusion and stability.
How the Score Works
The TruVision score ranges from 500 to 900 and is targeted for use when consumers apply for unsecured loans. This includes personal loans and other forms of credit where collateral isn’t necessary. Traditionally, a lack of credit history could lead to instant rejection of loan applications, but with this new score, lenders have a new tool that allows them to assess applicants more holistically.
As it stands, lenders may not have immediate access to this score, as it has just been released. However, it is expected that as the score gains traction, lenders will start considering it, especially for applicants with limited or non-existent credit histories.
What Data Is Included?
While TransUnion has not disclosed the specifics of the new scoring model, the score utilizes both positive and negative banking data. This data can include:
- Account Applications: The number and frequency of applications for new accounts.
- Account Closures: Reasons for involuntarily closed accounts.
- Unpaid Bills: Instances of unpaid overdrafts or bank fees.
- Check-Writing History: Including details on returned or bounced checks.
For a clearer understanding of what might be affecting your banking history, you can obtain a free annual report from resources like ChexSystems or Early Warning Services (EWS). These reports will give insight into negative banking behaviors that could influence your TruVision score.
Improving Your Score
Although TransUnion hasn’t clarified the exact mechanics behind the scoring process, we can deduce that healthy banking habits will likely play a transformative role in improving your score. Here are some effective practices to consider integrating into your routine:
- Limit Applications for New Accounts: Frequent applications for bank accounts can be flagged unfavorably.
- Avoid Overdrafts: Strive to keep your transactions within your available balance to avoid fees.
- Promptly Resolve Negative Balances: Address unpaid fees or negative balances as soon as possible.
- Maintain Vigilant Check-Writing Practices: Only issue checks when funds are confirmed to avoid bounced checks.
- Leverage Joint Accounts Wisely: If you struggle to qualify for your bank account, consider being added as a joint owner on an account held by someone with a good banking history. However, ensure that they have a sound financial record.
- Be Cautious with Joint Accounts: Avoid opening joint accounts with individuals known to have banking issues.
Alternatives for Building Credit
Building a credit history can be a straightforward process, especially if you understand the dynamics involved. If you’re new to credit, consider the following strategies:
- Add as an Authorized User: Ask a trusted family member with a good credit history if you can be added as an authorized user on their credit card.
- Secured Credit Cards: Consider applying for a secured credit card. This will usually require a cash deposit that serves as your credit limit.
For those struggling to open a checking account, seek out banks or credit unions that offer "second chance" accounts designed for individuals with past banking issues. And if that’s not an option, a prepaid card can help fulfill your banking needs without going through a conventional bank.
The Road Ahead
As of now, TransUnion has not disclosed which lenders will utilize the TruVision Alternative Bank Risk Score—it’s advisable to check with your lender to see if they have begun incorporating this new score into their evaluations.
The introduction of the TruVision Alternative Bank Risk Score marks a significant shift in how we can assess creditworthiness. This opens avenues for millions of Americans to gain access to the credit services they need. By adapting their banking practices and staying ahead of financial trends, individuals can transform their financial profiles and create opportunities for themselves in the broader financial landscape.
For more information on improving your credit score in 2025, check out our article with 10 tips that can help you take charge of your financial future today!