Step 1: Assess Credit Score Range of your Clients
Knowing the score range of your clients is helpful to create baseline data about your clients. It can also help you track the progress of your clients as you work with them to build credit.
Tip: Be consistent in tracking credit data - try to use the same score type from the same credit bureau.
Sample chart for evaluating FICO scores:
| 0 Score |
< 500 |
501 - 579 |
580-620 |
621-650 |
651-700
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> 700 |
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Sample chart for evaluating Vantage scores:
| 0 Score |
501-600
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601 - 700
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701 - 800
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801-900
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901-1000
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(F) |
(D) |
(C) |
(B) |
(A) |
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Step 2: Understand What's Behind the Score
While knowing the score is helpful to create baseline knowledge about your client's credit profiles, examining basic factors behind the score is important to help you understand why scores are low so you may offer appropriate credit builder products and services to your clients.
1. What percentage of your clients have zero or no credit history?
- Do you serve a lot of New Americans, immigrants or refugees who have never accessed credit?
- Are there no mainstream creditors in your community?
2. Do your clients have Active Credit Lines on their credit report?
Active Accounts are accounts reported on a credit report with regular monthly activity in the past 6-12 months.
- Are clients unable to make on-time regularly on active of lines of credit?
- Are clients borrowing from lenders who do not report monthly repayments (i.e. they have outstanding debt not on the credit report)?
3. How many Active Lines of Revolving Credit (i.e. credit cards) do clients have on their credit report?
- Do clients have credit cards?
- Do clients use credit cards well?
- Do you have a bank partnership to help clients open a (secured) credit card?
4. How many Active Installment Loans do clients have on their credit report?
- Do clients have outstanding vehicle loans or consumer loans not being reported?
- Are reported loans active or in default/collections?
5. How much outstanding debt do your clients have reported on the credit report?
< $1,000
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$1,001-$3,000
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$3,001 -$5,000
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$5,001-$10,000
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>$10,000
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Step 3: Where do your clients access credit?
1. How much outstanding debt do your clients have that is NOT reported on the credit report?
< $1,000
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$1,001-$3,000
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$3,001 -$5,000
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$5,001-$10,000
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>$10,000
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2. What kinds of debt do your clients have?
- What debt is not reported on the credit reports?
- Do they have an outstanding car loan? Payday loan?
- What is the age of their debt - has it gone to collections?
- Does the client have medical debt?
3. From whom do your clients borrow, especially in emergency situations?
- Do they use an active credit card?
- Do they have savings?
- Do they borrow from family and friends?
- Do they ask their employers for a salary advance?
- Can they get salary advance loans from the bank that receives their salary through direct deposit?
- Do they go to a Payday Lender?
Step 4: Evaluate Alternative Credit
1. Do your clients have a good history of paying back their bills on time?
- If they have a zero or no credit report, can alternative credit help them access credit?
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