US-based consumer credit bureau Equifax carries out certain telecommunications (i.e. telephone company), pay-TV and utility data available to the mortgage industry and efforts to support financially inclusive lending.
Equifax’s introduction of an enhanced US mortgage credit report is part of the company’s aim to provide a “big picture” of consumers’ financial profiles. The move could allow his more than 191 million consumers in America to enjoy better homeownership opportunities.
About 80% of these 191 million consumers have traditional credit files that do not take this information into account.
Equifax conducted research to understand the potential benefits of including telco, pay TV and utility attributes. The reporting agency found that of 255 million consumers, 30% could see an increase in their traditional credit score when attributes were included. This information could increase access to credit for millions of people in the United States.
Millions of subprime consumers (those with better credit scores or lower than those with “prime” scores) can also see an average increase of about 30 points using additional data. This shift will move many into a score band closer to prime, potentially greatly enhancing their ability to receive more favorable offers and rates.
“More Data Drives Better Decision Making”
Mark W. BegoCEO Equifax, said: Equifax understands that a single economic opportunity can be a critical step in building personal financial health and generational wealth, changing the trajectory of families and communities for generations. doing.
“More data drives better decision-making. We are investing $1 billion to enable our clients to provide more people with access to economic opportunities.”
Recent research by risk analytics providers and consultants Andrew Davidson & Co. We also found a strong correlation between consumers’ utility payment performance and future mortgage payment performance.
The firm’s research confirms that this correlation is most pronounced among borrowers with credit scores from the upper end of the subprime band (scores 580-619) to the lower prime (660-719). . These consumers are more likely to face problems obtaining a mortgage and may receive higher interest rates based solely on their credit profile.
Craig Crabtree Equifax senior vice president and general manager of mortgage and housing services said:
“Having these highly structured telco, pay TV, and utility attributes available to Equifax customers alongside their traditional mortgage credit report will help the mortgage industry and We look forward to partnering and realizing the full potential of helping millions of Americans achieve their goals of owning a home.”