New credit score models could mean more people are now eligible for home loans

WEST PALM BEACH, Fla. — At a time when it’s tough to find affordable homes in South Florida, two new lender credit models could mean millions more Americans now qualify for home and other loans .

“I feel like I have to live in my car,” April Wade told WPTV in May.

WPTV has reported extensively on South Florida’s housing crisis through its “Priced Out of Paradise” series.

“I’m just lucky to have this to sleep in,” Katie Rister said in August, of her car. “Without that, I would be on the street.”

Hopeful renters and homebuyers are feeling the pinch. Rising housing costs are forcing many people to leave South Florida.

Now more than 10 million people could qualify for a mortgage thanks to upcoming changes to lenders’ credit models.

The Federal Housing Finance Agency said it will now require mortgage lenders to integrate credit scores from FICO and a new credit rating agency VantageScore.

“Right now, our credit reports are a real-time snapshot,” said Paul Oster, founder of credit management company Better Qualified.

Alex Hagan/WPTV

Paul Oster, founder of credit management firm Better Qualified, talks to WPTV consumer investigative reporter Jessica Bruno about a new requirement that could help more people qualify for loans real estate.

Oster said that may change soon, as these new credit score models will incorporate things like a one-time rent or utility payment and cellphone payments that were previously not included in the credit score. of somebody.

“It’s going to go back 24 months to look at your credit card balances, which you’ve been doing for the last two years,” Oster said. “We hope this helps some people who don’t have many traditional credit accounts to report on their credit reports.”

However, Oster said, some things need to happen before this new plan will come to fruition.

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“We just hope that A, this will really work for the average consumer, and are government agencies really going to require lenders to use these scoring models?” Oster said.

If they do, Oster said, even with mortgage rates at two-decade highs, it will still help a lot of people finance their next home.

“There are millions of people (who are) not even on the FICO score radar,” Oster said. “They don’t have a credit score because they haven’t used traditional bank accounts, but that shouldn’t, you know, discriminate against them in terms of, you know, buying a house.”

Oster told WPTV that there is currently no deadline for the government to set requirements for lenders to use these new scoring models.

WPTV will follow this developing story.