Alternative Data from Equifax: Helping Expand Access to Homeownership

Equifax is committed to driving more inclusive financial opportunities that help people live their financial best. Financial wellbeing can start with a single opportunity, like purchasing a home-one that can change the trajectory of families for generations. More data drives better decisions, and Equifax is constantly working to provide a fuller financial picture of each consumer with alternative data insights that can help open up more mainstream financial opportunities to more people.

Alternative data is Fair Credit Reporting Act-complaint information not typically included in a traditional credit report such as rental, utilities and telecommunications payment histories. While traditional credit reports remain a strong indicator of credit history and past financial reliability, alternative data can responsibly expand access to credit and support a more inclusive economy.

Acceptance of New Credit Scoring Models

Equifax applauds the Federal Housing Finance Agency and the U.S. Department of Housing and Urban Development's recent announcement to permit the use of VantageScore 4.0 and FICO 10T as eligible credit scoring models for FHA-insured mortgage underwriting, and for Government-Sponsored Enterprises to immediately accept VantageScore-scored loans from approved lenders. As both agencies indicated, it is critical that alternative data-such as rent, utilities, and telecommunications payments-are considered as part of credit scores to offer a more comprehensive and "360-degree" view of a consumer's financial profile.

VantageScore 4.0® uses trended and alternative credit data to enhance the assessment of creditworthiness. Setting a model for the industry, it was the first credit score to incorporate these factors, with a goal of expanding access to credit for millions more Americans. VantageScore 4.0 analyzes up to 24 months of trended data, helping lenders identify qualified borrowers with "thin" credit files (four accounts or fewer) while maintaining the highest standards of safety and soundness.

Equifax Commitment to Mortgage Affordability

Equifax reiterated its commitment to mortgage affordability earlier this year, announcing it is offering VantageScore 4.0 mortgage credit scores for $1, providing a 90% savings over lenders' current mortgage credit score costs and enabling a potential $1 billion in savings for the mortgage industry. Additionally, Equifax continues to offer free VantageScore 4.0® credit scores to all Equifax customers in mortgage, automotive, card and consumer finance who purchase FICO scores.

Equifax is the only Nationwide Consumer Reporting Agency to provide alternative data attributes alongside a tri-merge credit report for the mortgage market, at no additional cost to lenders. These insights provide a more complete financial picture of a borrower that can make mortgage underwriting faster and easier and are only used to help consumers obtain a mortgage loan.

Equifax will continue to responsibly support its customers with the fullest insights available. Incorporating alternative data can help to establish greater financial health and generational wealth - creating a legacy of opportunity that echoes through families and communities.

Learn more about Equifax product offerings that use alternative data here.