One of the top subjects on the minds of real estate finance professionals has been the impending shift in credit scoring models that could cause a shakeup in the marketplace.
Ted Rossman, a longtime industry analyst at Bankrate, had plenty of insight to share about recent changes in FICO’s approach to credit scoring, particularly the introduction of FICO 10T, during an episode of the Keys to Real Estate podcast.
“There’s a very symbiotic relationship between the reports and scores and revenue model. But yet the credit bureaus have also stood up their own competitor to FICO, which is VantageScore,” Rossman said. “And even though FICO is used in 90 percent of lending decisions and VantageScore is more behind the scenes for looking at your own score or doing pre-screen marketing, VantageScore is moving into federally backed mortgage lending.”
The new model incorporates data and the impact of Buy Now, Pay Later services on credit scoring.
Rossman spoke with host Mary Schuster, chief knowledge officer at October Research, about the generational differences in attitudes towards credit and debt, the regulatory landscape affecting consumer protection, and the evolving relationship between FICO and mortgage lending.
He also emphasized the importance of incorporating rent payments into credit scores and volunteered some advice for real estate professionals navigating these changes.
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