We all have a credit score. Where do we do?

At the age of nine, José Quiñónez and his family emigrated from Mexico to the United States. He was undocumented. Once he got his permanent residency as a teenager, he was thrilled to get his first job and his first salary.

“I opened a checking account just to, you know, help save or manage the money I was making at the flea market,” Quiñónez said. This was all new to him. Growing up, her parents never had a bank account.

“We all worked and got paid in cash, and were able to pay our bills in cash as well,” he said. Quiñónez getting her own bank account as a teenager was an important first step towards establishing a credit score.

The credit score system relies on traditional banking to calculate creditworthiness. Credit scores can range from 300 to 850, and they help lenders determine whether an applicant should be granted a loan, credit card, or mortgage. In other words, these three-digit numbers can rule a person’s financial life.

But there is one group that is excluded from this system: people who do not have access to basic banking services, such as undocumented immigrants. They cannot qualify for most credit cards or other traditional loan services. This means they simply don’t have a credit score and establishing one isn’t always easy.

Michael Clements, director of financial markets and community investment at the Government Accountability Office, said these consumers are seen as “invisible credit”.

“These would be people who don’t have a record with the three major consumer reporting agencies,” Clements said. (That’s Experian, Equifax, and TransUnion.)

A 2015 Consumer Financial Protection Bureau report showed that some 45 million Americans had no credit score. It also looked at which groups typically don’t have access to banks. “Lower-income households, those with less education, and finally minorities, especially African-American and Hispanic households,” Clements said.

Without a bank, it’s hard to get a credit card, which starts your credit history.

Growing up with parents who were unbanked, Quiñónez experienced this firsthand. He is now the CEO of Mission Asset Fund, a financial technology company that formalizes what is called lending circles where undocumented and credit-blind borrowers lend each other money.

These loans are modest by many people’s standards, in the low four figures. One person receives the loan amount each month until everyone in the circle has a turn. This loan then becomes reportable to the credit bureaus, helping these borrowers establish a credit score.

“We work to help our immigrant communities basically become visible, active and successful in their financial lives,” he said.

Quiñónez’s company is not alone in doing so. More and more fintech companies are getting into the lending space, claiming they want to “democratize” banking and credit. But undocumented immigrants should exercise caution – some companies have come under fire over allegations predatory lending practices.

And borrowers who participate in the Quiñónez Lending Program must have cash on hand to be part of a Lending Circle. Getting a credit score this way, if you’ve been invisible to the system, still requires work and resources.

Michael Clement wrote several reports for the Office of Government Accountability. In report on the 45 million Americans who have no credit score, Clements focuses on how mortgage lenders could better utilize borrowers alternative data; for example, rent payment history, to increase “access to mortgages” for credit-blind borrowers.

Technically, you can have invisible credit even if you have a credit score. For example, if you only have a file in one or two of the three offices, for some reason. Credit.com published an explainer earlier this year about this:Are you one of the credit invisibles?

And finally, to learn more about the real consequences of living as an invisible consumer of credit, The Washington Post has a story about how it takes into account the huge gap between black and white home ownership.

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