One of the nation’s leading credit scoring companies has released a study that shows the use of trended credit data along with a traditional credit report could expand consumer access to credit to 1.5 million consumers per year. The Equifax Consumer Credit Impact Analysis determined that the inclusion of trended credit data could result in an approximate increase of four percent more mortgages—or 267,000 home loans—being issued to borrowers that would have previously been rejected as ineligible.
Equifax also stated that 4.1 percent home equity lines of credit—or 65,000 accounts—could be issued with this realignment to credit scoring. “Giving weight to how borrowers pay off credit debt puts more power in their hands to manage their credit evaluation.” said Peter Maynard, senior vice president global analytics at Equifax. “New ways of assessing consumer credit behavior through unique insights is something we are continuing to develop at Equifax, and opportunities to expand credit to consumers and mitigate for risk for lenders make these type of approaches solid ones for the entire marketplace.”
Source: National Mortgage Professional