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Apparently lawmakers last week slipped a provision in on a bank-deregulation bill that would require mortgage giants Fannie and Freddie to consider scores beyond FICO scores for mortgage consideration.
https://www.wsj.com/articles/ficos-lock-on-mortgage-credit-scores-comes-under-fire-1521019801
Sounds fine to me. No reason FHA loans should just use FICO. Plenty of scoring models.
As there is a paywall with the OPs link this is what is going on
While I have no love for any monopoly, I'm not sure I agree with the reasoning behind the drumbeat for a change. I certainly don't agree with using a score generated by the same company that provides your credit report.
All the groups listed as advocating for a change basically want to make it easier to get a mortgage. Regardless of whether the person pays the mortgage, PMI guarantees that the lender will get their money. So why not make a $220K mortgage loan to Poor John who hasn't done anything other than pay $80 a month for a cell phone? If he makes all his payments, great... If not, just making payments for the first two or three years before going into foreclosure nets them a nice profit after PMI makes them whole.
We tried that already in the early 2000's when the only qualifications were bascially "are you breathing?" Look where that got us? A nice big recession because so many people were defaulting on mortgages that they should have never been given.
I wouldn't have an issue with people who are on the bubble of qualifying for a loan having other histories considered as an additional factor to bump them into approval
NFCU MR: $25K | Venture: $21K | Amex ED: $18K | NFCU CR: $18K | Amex BCE: $15K | IT #1: $17.5K | PNC Core: $15K | PPMC: $12K | Wells Fargo: $11K | Savor: 12K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $7.3K | MLife: $9.5K | Sportsman's Guide: $8.7K | PenFed PR: $5.5K | Elan Plat: $2.3K | TRV: $3.6K | BotW: $3K
Current FICO 8 Scores: EQ: 828| TU: 805 | EX: 814
Given how long it takes for lenders to adapt to a new FICO score model, I'm suprised that the government would find it so easy to consider to do that not to mentioned this would all be done on our dime. I think the government should follow the lead of private industry.
Always be suspicious of what the real reason for this change is. Can the lender then require that their own score is needed (and charge extra for it on top of that)?