Federal regulators and Congress are currently urging the big boys in the residential lending sector to adopt a more inclusive model that includes non-banking forms of credit such as rent, cell phone and utilities payments along with consumers’ more traditional credit files. Both Fannie Mae and Freddie Mac are moving towards incorporating “alternate” credit scores and may be implementing them soon.
Congress has introduced – with bipartisan support, no less – legislation called the Credit Score Competition Act aimed at helping more consumers become more “scoreable” by considering such including such items as payment histories.
Both Freddie Mac and Fannie Mae argue that new scoring systems involve “significant” costs both for the companies and the lenders themselves but regulators and Congress seem adamant.
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