Equifax, one of the nation's largest credit bureaus, has joined the growing ranks of agencies that are expanding the acceptance of formerly non-traditional bill payments to help build and improve credit scores for potential homebuyers.
The company announced Thursday that it will provide certain telecommunications payments, pay TV and utilities attributes to the mortgage industry to help streamline the underwriting process and support loans within the secondary mortgage market.
Company officials said that providing those utility payments to mortgage lenders alongside traditional credit reports can help provide homeownership opportunities for more than 190 million consumers, 80% of whom have traditional credit files but may benefit from additional insights into their financial profiles.
The use of these expanded data insights can also provide visibility to millions of credit invisible consumers - those without traditional credit files - and enhance the financial profiles of thin, young and un-scorable consumers as they complete first mortgage applications, officials said.
"At Equifax, we strive to create economically healthy individuals and communities everywhere we do business," said Mark W. Begor, CEO of Equifax. "While traditional credit reports remain a strong indicator of credit history and past financial reliability, we believe that more data drives better decisions.
Begor added that by reviewing traditional credit reports alongside alternative data insights, it enables the mortgage industry to develop a more complete picture of a consumer's financial profile to drive greater financial inclusion by potentially streamlining the mortgage underwriting processes for many more consumers.
Equifax made news earlier this year for a credit-scoring error that affected some potential homebuyers. A class-action lawsuit has been filed.
The company will begin offering the additional consumer insights at no charge to customers beginning in the first quarter of 2023.
Fannie Mae and Freddie Mac announced their intention to include rent payments in mortgage decisioning earlier this year.
