Alternative credit could help with big life decisions

For those with poor or no credit, the holiday season can be a tough time of year. Trying to buy presents on a limited budget with no access to lines of credit is exceedingly difficult for some families.

However, there is some relief for those who pursue a Payment Reporting Builds Credit score, which credit bureaus can compile by proving a steady repayment history for multiple utilities accounts, showing evidence that individuals can pay back a loan. An alternative credit score is not just lucrative during the holiday season, as it can be successfully used to secure funds during other times of the year for larger purposes.

According to a recent CEB TowerGroup study, alternative data is playing a large part in securing mortgages, suggesting that lenders may want to consider changing their loan qualifications. People now pay back different expenses at different times, reflecting a changing economic landscape, not risky credit behaviors, the report revealed.

"As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies," CEB TowerGroup senior research director Craig Focardi explained.