Credit scores are going to be making news. Without a lot of boring details, this is because of a new bill on Capitol Hill that will allow other scoring methods besides the dominant, industry-standard Fair Isaac Corporation (FICO). Depending on how excited the media gets about this, the public will likely start hearing things like, “New credit scoring methods will make it easier for low and middle-income people and those without traditional credit histories to now be considered for mortgage loans.”
The bill – known as the Credit Score Competition Act of 2015 – is well-received within the industry. National Association of Mortgage Professionals past President John Councilman says, “The need to rethink credit scoring is long overdue – the current system shuts out some creditworthy borrowers.” Sounds good, right? It basically is…but it’s still important for consumers to get educated by lending and real estate professionals about what their specific options and challenges are.
The internet has been good and evil for the home buying process. News like the potential for people to use things like their rent payment history and other things to build a credit profile will open the door to all kinds of offers and promotions by online entities just looking to make a quick buck than build clients for life. “Too good to be true” offers that waste peoples’ time could sour bona fide potential clients on the idea and process of buying a home. That’s just wrong!
If you’re a consumer wondering if the changes in the works could help you, we can connect you with responsible, experienced professionals that can give you the real scoop for your specific situation. To our mortgage and real estate partners, let’s work together to make sure this piece of good news doesn’t backfire for the people it’s intended to benefit.