Alternative credit options offer several advantages

A Pennsylvania-based utility firm recently launched an alternative credit strategy, which will allow employees to open company-sponsored debit and checking accounts. "The MyPay Account provides an essential financial solution - both to utility workers who are seeking a low-cost alternative checking option - and to utility employers who would like to connect their unbanked or underbanked employees with a secure, easily-accessible account where they can electronically deposit their paycheck," said Jane Kennedy, marketing and business development manager at UECU. These accounts allow company employees to take out money and make purchases, with the funds coming directly from paychecks rather than a regular checking account. At the same time, the cards come with free fraud prevention measures, providing employees with complete protection from fraudulent transactions and identity theft. A recent report by American Banker highlighted the advantages of alternative credit data, notably that it allows people to build up credit so they are less likely to be denied lending. The news source suggested that alternative credit enhances consumers' chances at being able to afford higher-priced credit products. If alternative data were used, an estimated 40 percent of "unscoreable" consumers might be recategorized, according to research by PERC and the Brookings Institution.