To “streamline the mortgage underwriting process and support loans within the secondary mortgage market,” according to a statement released by Equifax on Friday, the mortgage industry will receive credit data for telecoms and subscription television from the credit agency.
More than 190 million consumers, 80% of whom have traditional credit files but may benefit from additional insights into their financial histories, may have better chances of becoming homeowners if utility payments are provided to mortgage companies alongside traditional credit reports, the company claimed.
According to Equifax, using telco and other non-traditional payment data might give millions of customers visibility and assist people with short credit histories as they start their homeownership journeys.
According to Equifax CEO Mark Begor, we work to build prosperous people and communities everywhere we operate. Traditional credit reports are a reliable source of information about credit history and prior financial dependability, but we think that more information leads to wiser choices.
According to Equifax, lenders would not incur further costs for the new client insights. In the first quarter of 2023, the business will start making these insights available to customers. In May, Equifax informed Fannie Mae and Freddie Mac that possibly inaccurate consumer credit scores and credit data reported by the firm for around three weeks might have been caused by a coding error. According to the credit company, less than 300,000 individuals had a change of 25 points or more in their credit ratings.
Fannie Mae and Freddie Mac use Equifax and the other major credit bureaus to calculate loan pricing. Freddie Mac stated that the error may have affected 12% of credit reports issued during this time in a letter to lenders earlier this year. To read more on this, click here.