New Credit Scoring Calculation Will Improve Access to Homeownership

REALTORS® welcome the recent announcement from Fair Isaac Corp., or FICO, that it will no longer penalize borrowers for certain debt-collection activities when calculating credit scores. Beginning this fall, FICO will no longer weigh medical debts -- which account for about half of all unpaid collections on consumers' credit reports -- as heavily as it did previously. Also, FICO will ignore any collections that have already been paid. According to the National Assocition of REALTORS® President Steve Brown, "This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates because of flawed credit scores. Since the housing crash, overly restrictive lending has been the greatest obstacle to homeownership."