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Opinion
Brian Chappatta

Big Banks Wake Up to Life Beyond Credit Scores

JPMorgan and other institutions plan to offer credit cards based on a broader swath of data. That could benefit Black and Hispanic Americans who have historically been left out.

Creditworthiness doesn't have to be determined by a FICO number.

Creditworthiness doesn't have to be determined by a FICO number.

Photographer: Thomas Cooper/Getty Images

The following headline from The Wall Street Journal is something of a Rorschach test for how a reader feels about the biggest U.S. banks: “JPMorgan, Others Plan to Issue Credit Cards to People With No Credit Scores.”

Someone who remembers the conditions leading up to the 2008 financial crisis might rightfully wonder if this is a ploy by large financial institutions to rope customers into onerous terms, just as they did with subprime mortgages. After all, this news comes when Americans’ credit-card balances have plunged by $157 billion since the end of 2019 to the smallest in four years; that’s a serious blow to banks’ bottom lines. Why not reach out to those with little-to-no credit history to make up the shortfall?