ATLANTA--(EON: Enhanced Online News)--Greg Rable, CEO of FactorTrust, The Alternative Credit Bureau, made a statement today to the home lending industry, strongly encouraging them to increase the availability of credit to a broader audience. As reported last week by the Wall Street Journal, lenders have become much more risk-adverse, making it more difficult for borrowers to get loans to purchase a home, a traditional pillar of the U.S. economy.
“The people with access to credit have become rich, and the people without access don’t even have a chance to climb up the ladder.”
Lewis Ranieri, a financier who pioneered the market for mortgage-backed securities in the 1980s, was quoted in the article, saying “The people with access to credit have become rich, and the people without access don’t even have a chance to climb up the ladder.”
Rable concurs: “Mr. Ranieri’s statement perfectly explains the problem. There are 113 million U.S. consumers with FICO credit scores under 700 today, many of whom have no credit history with the Big 3 bureaus (Experian, TransUnion and Equifax). Ignoring this population while considering home loans seriously impedes economic growth nationwide. A large number of these consumers are hard-working people who deserve the credit needed to own their own home. Lenders need access to better, real-time information so that they can make more loans. Our research proved that, when taking alternative credit data into account, this underserved population is shown to deserve credit options,” says FactorTrust’s CEO Greg Rable.
FactorTrust is piloting a new consumer-focused program, CreditClimber. CreditClimber enables consumers to assist in improving their CreditClimber credit score by linking monthly bill payment data (such as mobile phone, utilities, cable/satellite) and considering a person’s effort and actions to increase his/her financial literacy in order to provide lenders with a clearer view of their creditworthiness. By taking into consideration loan performance information that is not reported to the Big 3 bureaus consumers are more empowered to improve their score.
“Not all credit scores are created equal. We believe that every step a person takes to demonstrate their creditworthiness should help improve their credit and therefore their ability to get a home loan. This will ultimately be positive for the consumer and the overall economy,” says Rable.
FactorTrust, The Alternative Credit Bureau, is relentlessly dedicated to proven analytics and clean credit information that provide lenders opportunities to grow more revenue, meet compliance regulations and serve more consumers with more credit options. At the core of FactorTrust is alternative credit data not available from the Big 3 bureaus (Experian, TransUnion and Equifax) and analytics and risk scoring information lenders need to make informed decisions about the consumers they want. FactorTrust Alternative Credit Data and Analytics accurately predicts risk and the ability to repay of near and non-prime consumer loans in real-time. The company’s solutions enable financial service companies an opportunity to uncover creditworthy prospects that are not surfacing via traditional credit sources. Headquartered in Atlanta, the experienced FactorTrust team of predictive analytics specialists, statisticians and financial industry experts has delivered unique data and valuable insight to lenders throughout the U.S. for more than 10 years. For more information on the quarterly FactorTrust Underbanked Index or the company itself, visit www.FactorTrust.com.