The annual progress report on the Fannie Mae and Freddie Mac conservatorships reiterated that a new credit score model will likely not be operational until after the implementation of a new Single Security Initiative.
The two government-sponsored enterprises have relied on the “classic” FICO credit scoring model for the past 12 years. But the Federal Housing Finance Agency is weighing whether the GSEs should upgrade to more recent scoring alternatives.
Consumer credit varies nationally due to regional variations in income and the cost of living. To get a sense of where it's strongest and weakest, here's a look at the five best and worst states for consumer credit scores.
Competition in other areas of consumer lending has driven both VantageScore and FICO to build credit scoring models that are more accurate and more consumer-friendly. Permitting that competition in the mortgage market can increase certainty for lenders and transparency for investors.
Efforts to persuade regulators to allow Fannie Mae and Freddie Mac to use alternative credit scores would stifle competition between the credit bureaus and FICO and do little to expand access to credit, according to industry analyst Chris Whalen.