JPMorgan Chase, Wells Fargo, US Bancorp and other major banks in the United States plan to grant credit cards to customers
without a credit report
, who have traditionally been left out of these opportunities to borrow money, thanks to a pilot program supported by the Federal government that will take into account the information from these people's checking or savings accounts.
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The program, which will be launched this year, is aimed at
individuals who demonstrate financial responsibility.
To do this, banks will consider people's account
balances
over time and their
history of overdrafts.
Not having returned checks, for example, could improve a person's chances of approval, The Wall Street Journal reported.
This new plan is in contrast to the strategy generally employed by banks, which rely on credit scores and reports to determine whether or not a person is eligible for a loan.
Generally, people who only pay with cash or debit card, or who are new to the United States, do not usually have a credit score.
About 53 million adults do not have traditional credit scores, according to Fair Isaac Corp, creator of the FICO system.
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Black and Hispanic
adults
are more likely to lack credit scores
than whites or Asians, according to a 2015 report from the Consumer Financial Protection Bureau.
About 10 banks agreed to exchange data, one of the people familiar with the matter told the aforementioned outlet.
JPMorgan, for example, could approve a credit card application from a person who has a deposit account with Wells Fargo, but does not have a credit score.
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JPMorgan Chase is expected to be the first to use deposit account data to screen credit card applicants.
As early as this fall, the bank plans to start approving applications based on those inputs from the other banks.
"This is not a Hail Mary," said Marianne Lake, CEO of consumer loans at JPMorgan Chase.
"It's something that we know works."
With this measure, consumers could obtain auto loans or mortgages, for example.
With information from The Wall Street Journal and Reuters.