Credit Reporting Companies may begin incorporating additional debts in their Credit Score Models. An example of this is Experian, one of the three major Credit Bureaus start to incorporate rental payment history in their Credit Score Model. If Experian has started to do this, the other two major Credit Bureaus, Equifax and TransUnion can’t be far behind. This means that a Renter’s rental history is going to play a much bigger role in their future ability to purchase a home. Experian is also planning to add bounced checks and tenants leaving before their lease is up.
If incorporating additional debts into Credit Scores like nontraditional loans, child support, utility bills, and cell phones becomes a trend, then we will see a much greater impact on Credit Scores in the future than we do today. This could be a major advantage to people who do not have debts that are presently used to obtain Credit Scores by the three major Credit Bureaus. Historically Credit Scores have mainly been based on Mortgage Payments, Student Loans, Car Payments, and Credit Cards. If a potential Homebuyer does not have any of these types of debts, then they most likely do not have a Credit Score, and will have a very difficult time purchasing a home.
But if now Credit Bureaus begin to incorporate rent payments, nontraditional loans, child support, utility bills, and cell phones into their Credit Score Models, then possibly millions of people who presently do not have Credit Scores will have them in the future. The negative would be that once those additional debts are included they could also cause Credit Scores to go down if those payments are not made.
I have not seen any of these additional debts being reported yet, but if I begin to see them being report on Credit Reports, I will report it.
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Who To Call For Your Mortgage Needs In Connecticut:
George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.
