Forget FICO: National Association of Realtors Declares Support for Alternative Credit Scoring
National Association of Realtors declares support for alternative credit scoring
The National Association of Realtors sent a letter to two members of Congress this week, declaring the organization’s support of alternative credit-scoring models that could be used to open the credit box to previously underserved borrowers.
In a letter sent this week to Rep. Ed Royce, R-CA., and Rep. Terri Sewell, D-AL., NAR President Tom Salomone writes that NAR supports the “Credit Score Competition Act of 2015,” which Royce and Sewell introduced last year.
The bill, which is yet to be considered by the House Financial Services Committee, would enable Fannie Mae and Freddie Mac to consider other credit-scoring models beyond the FICO credit score the government-sponsored enterprises currently use when determining what loans to purchase.
In Royce and Sewell’s view, lower-to-middle income Americans who are qualified to buy a home but are unable to do so because of their FICO score or lack thereof will “specifically benefit from the GSEs using other credit scoring models.”