Officials Agree: Credit Scoring System Needs Improvement
The National Association of Realtors hosted a meeting of real estate and mortgage industry experts recently and found that many in attendance were in favor of a complete overhaul of the current credit scoring system, arguing that it’s essential for the future of the housing industry.
“[It] needs to change to reflect how people live their lives today, or millions of people will continue to fall outside traditional calculation models and not be able to become home owners,” Housing and Urban Development (HUD) secretary Julian Castro told the group.
The most important shift that needs to take place, the group suggested, is taking into account “new ways of analyzing data to reflect the responsibility people show in their lives that is predictive of future behavior and paying down a mortgage.”
“It’s such a critical topic,” NAR president Chris Polychron said in closing the meeting. “We’d like to see these scoring models that rely on non-traditional histories. We just have a lot to do.”
Image via flickr/Simon Cunningham