Equifax Seeks to Improve Mortgage Lending Process with Deeper Data


Credit reporting agency Equifax says it is now offering expanded U.S. mortgage credit reports that include certain telecommunications, pay TV and utilities information to provide a fuller picture of consumers’ financial profiles.

Anonymized Equifax research into the potential benefits of telco, pay TV and utilities attributes found that among 255 million U.S. consumers, 30% could potentially increase their traditional credit score if the attributes are included – helping to increase access to credit. Millions of subprime consumers could also see an average increase of approximately 30 points from use of the additional data, moving them into the near-prime score band and potentially enabling them to receive more favorable offers or rates, Equifax says.

“Equifax understands that a single financial opportunity can be a critical step to establishing individual financial health and generational wealth, changing the trajectory of families and communities for generations,” comments Mark W. Begor, CEO of Equifax. “More data drives better decisions, and we have invested billions into cloud-based technology solutions and powerful differentiated data sources that give new visibility to underserved individuals, empowering our customers to bring greater access to financial opportunity to more people.”

The majority of U.S. adults have at least one utility bill or cell phone in their name, making utility data a widespread and powerful indicator of past financial reliability. A recent study by Andrew Davidson & Co. analyzed U.S. mortgages from January 2019 for consumers with non-traditional credit histories (young, thin or no-hit) and found a strong correlation between positive consumer utility payment history and future positive mortgage payment performance. The firm’s research also confirmed this correlation across a wide range of credit scores for these borrowers, most notably among borrowers from the high-end of subprime (credit scores of 580-619) through lower prime (credit scores of 660-719) score bands.

“Our research has confirmed strong analytical support for the use of utility attributes in assessing potential mortgage risk,” says Andrew Davidson, president of Andrew Davidson & Co. “We identified encouraging performance data in our research that shows a strong correlation between past favorable utility payment history and future mortgage performance. It’s even more pronounced when multiple utility attributes are considered.”

For mortgage lenders, the ability to consider telco, pay TV and utilities insights in addition to the traditional credit report supports financially inclusive lending, helping to expand the availability of credit to more borrowers. These additional insights are delivered alongside Equifax mortgage credit reports at no additional cost to lenders, helping them simplify the manual underwriting process, improve the customer experience and reduce lender costs while enhancing the borrower experience.

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