FHFA’s Evaluation of Credit Scores Misses the Mark

Brief

FHFA’s Evaluation of Credit Scores Misses the Mark

March 8, 2018

Abstract

This comment letter responds to the Federal Housing Finance Agency’s (FHFA) December 2017 request for input on the government-sponsored enterprises’ (GSEs’) requirements for credit scores used in mortgage underwriting. The authors express their support for FHFA’s efforts to upgrade the outdated credit score requirements and point out that FHFA’s thinking does not go far enough because it does not encourage greater use of additional data, such as data on rent and telecom payments. They urge the FHFA to take a view of competition within the credit scoring space broader then that contemplated by their questions – one that includes both credit score modeling firms and providers of additional data.

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