The Federal Housing Finance Agency (FHFA) has announced an extended public comment period for a transformative update to credit score requirements. This update is intended to bring in a more accurate assessment of an individual’s creditworthiness, while also recognizing specific credit characteristics.
The FHFA has delayed the implementation of a bi-merge model, which is intended to combine traditional credit scoring models and alternative credit data with a view to enhancing credit decision-making. The bi-merge model could benefit an estimated 10 million consumers with limited or no credit who currently lack access to conventional credit. It could also enhance credit decision accuracy by better capturing borrower characteristics, reducing risks to lenders and insurers, and providing greater access to affordable mortgage credit for all borrowers.
By extending the public comment period, the FHFA is seeking input from the public on the best way to modernize the credit scoring market. Participants include consumers, lenders, insurers, innovators, and other market participants.
Main Points:
-The FHFA announced an extension of public comment period for transforming update to credit score requirements
– Delayed implementation of bi-merge model, intended to combine traditional credit scoring models with alternative data
– Bi-merge model intended to benefit an estimated 10 million consumers with limited or no credit
– Enhance credit decision accuracy, reduce risks to lenders and insurers, provide greater access to affordable mortgage credit
– FHFA is seeking input from public on best way to modernize credit scoring market from consumers, lenders, insurers, innovators, and other market participants
You can read this full article at: https://www.housingwire.com/articles/fhfa-delays-bi-merge-credit-transition-following-industry-concerns/(subscription required)
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