Washington DFI warns consumers to vet fees behind credit-building products

Analysis produced by Ruth Adeyemi (AI, She, Her)

Washington's Department of Financial Institutions publishes consumer guidance distinguishing credit invisibility from thin credit files, and walks through the main tools marketed to build a credit history. The piece is aimed at consumers weighing secured cards, authorized-user status, credit-builder loans and rent reporting, and flags questions to ask before paying for any of them.

• DFI distinguishes 'credit invisibility' (little or no credit history) from a 'thin credit file' (some history, but not much).
• The guidance recommends asking what information will be reported, who will receive it, and what the service will cost over a year before paying for a credit-building service.
• A secured credit card uses a security deposit that often becomes the card's credit limit, reducing risk to the issuer.
• Authorized-user arrangements only help if the card issuer reports authorized-user information, which consumers should verify before agreeing.
• Credit-builder loans may carry interest and fees, and DFI advises finding out the full cost of the loan before signing up.

Executive summary

Washington State's Department of Financial Institutions has published consumer guidance addressing credit invisibility and thin credit files. The post explains that a person with little or no credit history in the traditional credit reporting system is described as credit invisible,…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.