Easier Mortgage Access Through Alternative Data
New rules will make it easier for individuals with limited credit history to access mortgage loans. Banks will be required to consider alternative data, such as consistent rent or utility payments, if requested by the applicant. This aims to particularly benefit low-income individuals and minority groups who often face challenges in obtaining credit.
Key points
Lenders must consider alternative data (e.g., rent payments) when assessing creditworthiness if the applicant requests and authorizes it.
This information will be treated with the same weight as data from traditional credit bureaus, unless found to be a misrepresentation.
Applicants will receive clear notices about their right to provide additional data, available in the eight most commonly spoken languages.
Mortgage underwriting systems must be updated to incorporate these new data types.
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