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Equifax Makes the Mortgage Industry More Financially Inclusive With Bill Payment Data

US-based consumer credit reporting agency Equifax has made specific telecommunications (namely telco), paid TV and utility data available to the mortgage industry, in an effort to support financially inclusive lending.

Equifax’s introduction of expanded US mortgage credit reports is part of its aim to provide a “fuller picture” of consumers’ financial profiles. The move could enable more than 191 million consumers in America to receive better opportunities for homeownership.

Of those 191 million consumers, around 80 per cent have traditional credit files which do not take into account this information.

Equifax conducted research to understand the potential benefits of including telco, pay TV and utility attributes. The reporting agency found that of 255 million consumers, 30 per cent could see their traditional credit score increase if the attributes are included. This information could provide increased access to credit to millions in the US.

Millions of subprime consumers (those with a credit score lower than someone with a good or ‘prime’ score) could also see an average increase of around 30 points from the use of the additional data. This shift would move many into the near-prime score band, potentially greatly enhancing their ability to receive more favourable offers and rates.

‘More data drives better decision’

Mark W. Begor, CEO of Equifax, said: “Our company purpose is to help people live their financial best. Equifax understands that a single financial opportunity can be a critical step to establishing individual financial health and generational wealth, changing the trajectory of families and communities for generations.

“More data drives better decisions, and we have invested billions into cloud-based technology solutions, as well as powerful differentiated data sources that give new visibility to underserved individuals, empowering our customers to bring greater access to financial opportunity to more people.”

A recent study by risk analytics provider and consultant Andrew Davidson & Co. also found a strong correlation between positive consumer utility payment history and future positive mortgage payment performance.

The firm’s research confirmed this correlation was most notable among borrowers with credit scores in the high-end of the subprime band (scores 580 to 619) through to lower prime (660 to 719). These consumers will more likely face challenges when obtaining a mortgage and receive higher rates based on their credit files alone.

Craig Crabtree, senior vice president and general manager of mortgage and housing services, at Equifax said: “The findings of Andrew Davidson & Co.’s research underscores the value of these insights to help create a better pathway for many Americans to establish homeownership.

“With these highly structured telco, pay TV and utility attributes now being available to Equifax customers alongside traditional mortgage credit reports, we look forward to partnering with the mortgage industry so that, together, we can realise the full potential in helping millions of Americans achieve their goal of home ownership.”

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