In March of 2020, the Federal Housing Finance Agency announced their intention to sunset the FICO Classic credit model by the end of 2021. The move signals a shift away from traditional credit scoring models in favor of newer, more predictive methods. The FICO Classic model has been in use for over two decades and is the industry standard for credit scoring. However, it has come under fire in recent years for its lack of predictive ability and its reliance on outdated information.
The FHFA’s decision to sunset the FICO Classic model is a positive step forward for the industry. It signals a move towards more modern, predictive credit scoring models that can more accurately assess a borrower’s risk. This is good news for borrowers, as it will allow them to access more affordable credit products. It is also good news for lenders, as it will help them to better identify and manage risk.
You can read this full article at: https://www.housingwire.com/articles/fhfa-announces-timeline-to-sunset-fico-classic-credit-model/(subscription required)
Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid. Contact us today for more information.
