Fannie, Freddie to Consider Alternatives to FICO Scores Under New Rule
14 August 2019 - 4:32AM
Dow Jones News
By Andrew Ackerman
WASHINGTON -- One firm's dominance over the credit scores used
to vet many U.S. mortgages is getting a shake-up.
Fannie Mae and Freddie Mac, two mortgage-finance firms that back
nearly half of U.S. mortgages, will have to consider credit-score
alternatives to Fair Isaac Corp.'s FICO score when determining a
mortgage applicant's creditworthiness, under a new rule completed
on Tuesday by the mortgage-finance giants' federal overseer.
The move by the Federal Housing Finance Agency is seen as a win
for VantageScore, a credit-score system by VantageScore Solutions
LLC, which is owned by the three large credit-reporting firms:
Equifax Inc., TransUnion and Experian PLC.
Tuesday's rule sets up a four-phase process for Fannie and
Freddie to validate and approve credit score models. The measure is
required by a regulatory rollback signed into law last year.
(More)
AnnaMaria Andriotis contributed to this article.
(END) Dow Jones Newswires
August 13, 2019 14:17 ET (18:17 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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