Reuters. How the Biden administration wants to make credit scores more equitable
By Matt Scuffham
(Reuters) - A chance conversation with a customer ended up saving Vincent Lipford, a self-employed barber in Memphis, Tennessee, more than $20,000.
The 51-year-old single father was stuck in a subprime auto loan with a 25% annualized interest rate because he lacked the credit history that would allow him to obtain financing from traditional lenders. The interest would have cost him nearly as much as the Kia Forte itself if he followed the payment plan to fruition.
When Donald Hall, regional vice president at the Hope Credit Union, strolled in one Saturday for his weekly haircut, he was alarmed to learn about Lipford's situation. He helped refinance the loan into another whose interest rate is just 4.2%, based on his mobile phone and utility bill payment history - factors that firms that determine credit scores and banks ignore.