In August, Fair Isaac Corp., the Minneapolis provider of FICO scores, started offering an alternative scoring system that uses nontraditional consumer data, such as information from payday loans and payment plans for retail purchases. The Charlotte banking company looks at rent and utility data in underwriting because 'for people that don't have established credit, those other obligations can be a reliable track record.' Davis said B of A is aware of alternative scores but has not yet decided to use any. Pay Rent's founder, Michael Nathans, said it would announce a number of new partnerships within a month. 'It's something that we're very cognizant of and working on,' he said. The GSE's goal, he said, is to incorporate the information into automated underwriting. The company has no timetable for incorporating the score into its underwriting, she said.Ĭhip Coffay, a director in Fannie's single-family credit department, said the government-sponsored enterprise has been researching nontraditional credit in underwriting for some time, and recommends that lenders use information such as rent, utility, and insurance payments in underwriting. 'What they're doing is very important,' said Patricia Boerger, a spokeswoman for Freddie. Pay Rent, Build Credit Inc., an Annapolis, Md., credit bureau, developed the scoring system that Fannie, Freddie, and CitiMortgage Inc. 'We're looking for partners to validate what we're bringing to the marketplace.' 'We need to understand what kind of performance characteristics it has,' he said. Catone acknowledged that First American must prove that the score is reliable. As more young borrowers and immigrants buy homes, 'these kinds of credit determinations will be incredibly useful.' 'I think lenders should give credence' to First American's system, Mr. Robbins, the chief executive of American Mortgage Network, a San Diego wholesale and correspondent lender, said alternative credit scores can 'ultimately be only beneficial' to the mortgage industry. There is a 'high degree of interest' in the score, which is geared specifically to mortgage lenders, Mr.

'We're trying to step out in a leadership position and at least solve part of the problem.' 'There wasn't a good solution to summarize a nontraditional credit history into a concise result,' said Mark Catone, a senior vice president at First American. 'We hope that … will make it easier to do business with emerging-market borrowers and give them confidence to come to us rather than predatory lenders,' he said.Īnthem (for 'assisting nontraditional homebuyers in emerging markets') is calculated using rent, utility, insurance, and car loan payments and other information. Peter Milewski, the director of mortgage insurance funds at MassHousing, said it conducts roughly 5% of its business with customers who have thin or no credit files.

MassHousing, a Massachusetts agency that lends to low- and moderate-income borrowers, has agreed to use the Anthem score, which the Santa Ana, Calif., data provider and title insurer First American Corp. 'We are looking at different models that are out there and talking to some providers of this type of information.' 'There's a huge opportunity to provide credit and mortgages to Americans who are outside of the credit realm,' said Susan Gustavson, a senior vice president at First Franklin.

Anthemscore alternative