Expanded reporting for ‘credit invisibles’ could do more harm than good
“Limited-income families struggle to make ends meet. It is far from clear that more credit reporting will assist vulnerable households obtain credit. In particular, gas and electric companies reporting payments may result in negative marks for millions of families — disproportionately families of color — who struggle to pay huge winter heating or summer cooling bills, but catch up on their debts in subsequent months. At present, gas and electric utility companies typically only report accounts that are seriously late, such as those that are written off or sent to collection agencies. These accounts are a small fraction of the total number of accounts with late payments.”