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Recent Changes In Credit Score Calculation Benefits Buyers

Recent Changes In Credit Score Calculation Benefits Buyers

Sometimes, even if you’re great with money, obtaining a mortgage can be difficult. Bob and Lucia thought they were ready to purchase their dream home, but they kept watching as the homes that fit their detailed expectations slipped through their fingers on teamre.com. You know…4 bedrooms, a home office already set up in the finished basement, and even a home theater. The perfect homes for their lifestyle. So what was the issue? Limited credit.

While Bob and Lucia were great with money and paid cash for their vehicles, vacations, and really everything, they never had a credit card. They also paid all of their bills on time, so nothing ever went to collections. All of this sounds pretty perfect, right? Well, the credit bureaus didn’t have enough data to give them a decent score. No decent score, no mortgage. No mortgage, no dream home…

This all changed in October 2022, though! The Federal Housing Finance Agency (FHFA) announced on October 24, 2022, that rent payments, same-as-cash payments, cell phone bills, and more would be added to the new FICO 10T standards! If you pay all of these bills on time, your credit score will be positively impacted. This is a game changer for so many families who avoid credit for whatever reason. Bob and Lucia included!

Another recent change to how mortgage qualifications are looked at revolves around the “two-score system”. Lenders are now adopting this system that drops the lesser of the three credit bureau scores. Instead of looking at all three numbers, they will now average the top two, giving more borrowers a better chance of qualifying for a loan.

Now that these changes have gone into effect, Bob and Lucia easily qualify for a mortgage. Once they received their pre-approval, they got their next offer accepted and will be able to celebrate this Christmas surrounded by family in their new dream home!

Do you identify with Bob and Lucia? Let’s get connected! We have a great team of lenders who will work with you to get you in your dream home!


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