The heavy reliance on credit scores to determine a person's "worthiness" for loans has led to the exclusion of many otherwise responsible citizens from the chance to purchase a home, a car, or any sort of collateral.

"Thin credit" histories often trap consumers into accepting deals with higher interest rates and predatory terms, which disproportionately affects black and Hispanic borrowers.

Now there is increasing support for the use of "alternate" credit scoring -- building a financial history through paying bills or other means besides using credit or debt -- to gauge a borrower's ability to handle their money.

A recent study by the National Association of Hispanic Real Estate Professionals found that one-third of the respondents couldn't get loans for their clients because they had little to no "traditional" credit records, and that many of their borrowers had to pay exorbitant rates as a result.

If the mortgage and financial industries embraced alternative credit scoring as a means to encourage home ownership within the growing Hispanic market, it would inject as much as $200 billion in capital into a slumping industry, the report said.

The Association joined a growing chorus of business professionals, lenders, and analysts calling for greater implementation of "alternate" credit scoring, utilizing payment of bills and rent to recalculate a borrower's overall "responsibility."

Alternate credit scoring is already practiced by many businesses, after a fashion. Many utilities regularly report customer payment data to the major credit bureaus. If a customer misses a single bill payment under the principle of "universal default," their credit scores could drop and their borrowing interest rates would rise accordingly.

The town of Havelock, North Carolina recently introduced a new policy that grades customers' utility payment deposit on their paying history, a trend being repeated across the state.

Havelock's finance director, Lee Tillman, said the new system would reward customers that pay regularly and on time, while recovering losses from customers who do not.

"Thin credit" advocates are pushing for credit reporting agencies and businesses to regularly document positive payment data on a wider level, in the hopes that it will grant more consumers the chance to enjoy the benefits of property ownership without taking on heavy debt.

Leading "alternative" credit bureau PRBC (Payment Reporting Builds Credit) recently obtained a patent for the system it uses to track and record monthly bill payments and develop credit files from the information.

PRBC chairman Michael Nathans said the move "recognizes PRBC's technologyfor storing and scoring that data to produce a report indicating the payer's creditworthiness, specifically their willingness and ability to make timely payments."

Corey Stone, PRBC's CEO, also touted the value of credit scoring as a way for banks and insurers to lure otherwise ignored customer groups to use their products.

"It gives banks and credit unions a new way to help their customers build credit and secure their financial futures, while supporting higher depositor retention and cross-selling with the institution's credit and insurance products," he said.