The National Association of Realtors (NAR) is reporting that the use of new credit-scoring models could greatly help borrowers who lost their homes during the foreclosure crisis to buy again. Of the 9.3 million homeowners who lost their homes to foreclosure, nearly 1 million have been able to purchase a home again. These “boomerang” buyers are seen as crucial to the housing market by many analysts as they could add 1.5 million buyers to the market over the next five years.
Of course, poor credit profiles and stricter lending practices will continue to bar many from buying but the hope is that the new credit-scoring models could improve some borrowers’ access to credit. Specifically, the new models produce higher credit scores for those with unpaid medical bills as well as factoring in a would-be buyer’s rental payment history.
The question remains as to whether lenders will accept these new credit-scoring models but for now at least, there’s hope for many to “get back in the game.”