Fannie, Freddie to Consider Alternatives to FICO Scores Under New Rule

Date : 08/13/2019 @ 7:32PM
Source : Dow Jones News
Stock : Fannie Mae (QB) (FNMA)
Quote : 3.9499  -0.0501 (-1.25%) @ 9:58PM
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Fannie, Freddie to Consider Alternatives to FICO Scores Under New Rule

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By Andrew Ackerman 

WASHINGTON -- One firm's dominance over the credit scores used to vet many U.S. mortgages is getting a shake-up.

Fannie Mae and Freddie Mac, two mortgage-finance firms that back nearly half of U.S. mortgages, will have to consider credit-score alternatives to Fair Isaac Corp.'s FICO score when determining a mortgage applicant's creditworthiness, under a new rule completed on Tuesday by the mortgage-finance giants' federal overseer.

The move by the Federal Housing Finance Agency is seen as a win for VantageScore, a credit-score system by VantageScore Solutions LLC, which is owned by the three large credit-reporting firms: Equifax Inc., TransUnion and Experian PLC.

Tuesday's rule sets up a four-phase process for Fannie and Freddie to validate and approve credit score models. The measure is required by a regulatory rollback signed into law last year.

(More)

AnnaMaria Andriotis contributed to this article.

 

(END) Dow Jones Newswires

August 13, 2019 14:17 ET (18:17 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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