New Hope for Borrowers with Little or No Credit Seeking a Mortgage
A new collaboration between PRBC and Fair Isaac, founder of the FICO score, claims to help consumers with little or no credit history qualify for mortgages more easily.
Currently, on-time payments for items such as rent, phone bills, utility bills, cable bills, and other related services are not reported to the three major credit bureaus.
This makes it increasingly difficult for consumers to build credit without opening credit cards or having previous home or auto loans on their credit report to prove their ability to handle large amounts of debt.
Young adults and immigrants are the most at-risk of being turned away for a mortgage due to limited credit history, as most lenders require a minimum of three active tradelines with a 24 month history on each.
With the new “PRBC Credit Report with FICO® Expansion® Score”, mortgage lenders will be able to gauge a borrowers credit worthiness more accurately, regardless of credit depth.
The National Credit Reporting Association (NCRA), which provides the mortgage lending community with more than 3,000,000 mortgage credit reports per month, will sell the new risk-assessment package to mortgage lenders and brokers.
If you have a thin credit file, it may be worth checking out the new program at the PRBC website to learn how to add your monthly payment information to the new credit reporting system.
It’s a shame the program came out after the housing boom, although anyone who wanted a mortgage seemed to get one regardless of credit worthiness, based on the surging number of defaults on home loans we’re seeing nowadays.
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- Order a Free Credit Report Long Before Searching for a Mortgage
Posted Under: Credit News