By Suzanne Blake

Copyright newsweek

A new bipartisan bill could enable millions of Americans to improve their credit scores by incorporating on-time rent payments into their credit ratings.U.S. Representatives Young Kim, a California Republican, and Janelle Bynum, an Oregon Democrat, introduced the Credit Access and Inclusion Act on Tuesday as a means to expand the types of information that can be included in a person’s credit history, including rent, internet, phone, electricity, and utility payments.Why It MattersRoughly 26 million Americans are considered “credit invisible,” meaning they lack a history of traditional payments, such as student loans, car loans, or mortgage payments, according to Young’s office.However, if the definition of what counts as credit were expanded, many more Americans would be able to qualify for better interest rates and loan terms, and likely purchase homes with more favorable financial outcomes.What To KnowThe Credit Access and Inclusion Act would make several changes to the way credit is calculated for Americans.For one, it would allow landlords, utilities, and telecom providers to report on-time payments to credit reporting agencies, enabling consumers to build their credit even if they are not making regular loan payments.It would also allow consumers to opt out of reporting these specific categories and prevent utility companies from reporting late payments if they are meeting the terms of a repayment or debt forgiveness program.The proposal also calls for a federal study on the impact of the expanded reporting to determine how additional data, such as cash flow and payroll deposit verification, could improve credit scores.”Having good credit opens new doors for Americans. When hardworking families sacrifice to pay their bills on time, they deserve credit for that,” Kim, who is the co-chair of the House Financial Literacy and Wealth Creation Caucus, told Newsweek. “As co-chair of the House Financial literacy and Wealth Creation Caucus, I am dedicated to ensuring every American—regardless of their financial background—has the tools they need to unlock financial opportunity and achieve their American Dream.”What People Are SayingRepresentative Janelle Bynum said in a statement: “Every American should have the opportunity to participate in our economy – building credit plays a big role in making that happen. Everybody has to start somewhere, and making rent and utility payments on time should count. My bill makes it easier for people to build good credit when paying for their monthly expenses, and I’m proud of its bipartisan support. I’ll continue to work with anyone to make sure my constituents aren’t boxed out of the American dream.”Representative Young Kim said in a statement: “Having good credit opens new doors for Americans. Unfortunately, our credit system has not kept up with technology, keeping Americans from building their credit score despite consistently practicing healthy financial behavior.”The Credit Access and Inclusion Act brings credit reporting into the 21st century so hardworking Americans can grow their credit and get a leg up. I am proud to lead this commonsense bill with Rep. Bynum, and I will keep being a loud voice for access to opportunities that keep the American dream alive.”Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “This is the latest proposal that looks to expand the criteria of what factors play into crafting one’s credit score. This bill, which has bipartisan support, would expand rent, utilities billing, and other routine payments to be included in your credit score development.”What Happens NextLow-income Americans would likely benefit from the legislation. Bipartisan support boosts the bill’s chances of getting approved.”There’s a reason for this: many Americans who are economically struggling are having a harder time building credit for those aspirational purchases,” Beene said. “This could potentially open more doors, and it does have a chance of passing thanks to fairly widespread congressional support.”