Create more homeownership opportunities for borrowers without credit scores
We believe consumers should benefit from their responsible money management habits and a steady stream of income when buying a home, even if they don’t have an established credit history. With upcoming enhancements in Desktop Underwriter® (DU®), consumers who apply for home loans where no borrower has a credit score will be better positioned to access credit, and lenders will benefit from a simplified underwriting process too.
This is another step in our commitment to drive positive change and create a more equitable and sustainable homebuying process.
Here’s how we’re doing it
Why this is important
Millions of people in the U.S. are credit invisible, with Black and Latino/Hispanic people disproportionately represented. Close to 15% of Black and Latino/Hispanic people are credit invisible – compared to 9% of their white and Asian counterparts, according to the Consumer Financial Protection Bureau (CFPB).
Another reason to use asset data
Increase lending opportunities
- Leverage cash flow to help borrowers without credit scores qualify for a loan
- Use consistent rent payment history to qualify more first-time homebuyers (for borrowers with a credit score)
- Obtain asset validation for borrowers through the DU validation service
- Reduce paperwork, save time
- May satisfy requirements for nontraditional credit source documentation
Take advantage in 3 easy steps
After you have ordered a credit report and verified that the borrower(s) on the loan application do not have a credit score, follow the steps below to enable DU to conduct a cash flow assessment:
- Educate the borrower about the asset verification process, how it works, and obtain the appropriate borrower consent to order a report.
- Order a report with 12-months of asset data from an authorized verification report supplier. Enter the Reference ID in DU.
- Review the DU Underwriting Findings messages to see if the bank statement data has been considered.