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Officials Agree Credit Scoring System Needs Improvement
Monday, April 6, 2015
The National Association of Realtors®
(NAR) recently hosted a meeting of about a dozen real estate and mortgage
industry experts to examine the current state of credit scoring and how it
might be improved. The group, which
included Housing and Urban Development (HUD) Secretary Julian Castro, concluded
that the calculation of credit scores "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."
Castro told the group that HUD was
looking at the credit scoring issue as part of its effort to improve Americans'
credit access. There is a need to look
at 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.
"There's been a disconnect there," the Secretary said.
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