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Equifax to provide utility credit data to mortgage firms

Providing utility payment data could help 190 million consumers, credit bureau says

Equifax will be providing telecommunications and subscription television credit data to the mortgage industry to “streamline the mortgage underwriting process and support loans within the secondary mortgage market,” the credit bureau said Friday.

Providing utility payments to mortgage companies alongside traditional credit reports could improve homeownership prospects for more than 190 million consumers, 80% of whom have traditional credit files but may benefit from additional insights into their financial histories, the company said.

Utilizing telco and other non-traditional payment data could bring visibility to millions of customers without traditional credit files, and help those with thin credit histories as they begin their homeownership journeys, Equifax said.

“At Equifax, we strive to create economically healthy individuals and communities everywhere we do business,” said Equifax CEO Mark Begor. “While traditional credit reports remain a strong indicator of credit history and past financial reliability, we believe that more data drives better decisions.”

He noted that the mortgage industry will have a more complete picture of a consumer’s financial profile with alternative data insights, which will streamline the mortgage underwriting process for some customers.

Equifax said the new customers insights will be provided at no additional cost to lenders. The company will begin making these insights available to customers in the first quarter 2023.

In May, Equifax told Fannie Mae and Freddie Mac that a “coding issue” may have resulted in erroneous consumer credit scores and credit data the company reported for about three weeks. The company said less than 300,000 consumers had their credit scores changed by 25 points or more in any direction.

Fannie Mae and Freddie Mac rely on Equifax and the other major credit bureaus to determine loan pricing. In a letter to lenders earlier this year, Freddie Mac said the error “may have impacted” 12% of credit reports issued during this period – millions of people.

Equifax is facing a class-action lawsuit related to the error.

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