Some Credit Scores Could Move 80 Points Higher

by | Jan 4, 2022 | Mortgage Information, Real Estate Buyer Tips, Residential Real Estate News | 0 comments

A study to find the impact of new credit score data – rent and utility payments – found the biggest boost for consumers who haven’t used credit in at least six months.

STAMFORD, Conn. – Some homebuyers can now have their rent and utility payments considered by credit score companies, and VantageScore Solutions conducted a study to determine how much their scores might change.

Overall, the study found that it would improve credit scores, especially for consumers with limited information in their credit files. Limited credit information is a common trait of underserved consumers, including some Blacks, Latinos and recent immigrants, even if they consistently pay rent, gas and electric bills on time.

While each consumer and their credit score is unique, the study found that credit score increases were greatest for consumers with less recent credit activity or limited credit histories. For example, consumers that haven’t used credit for six months or more could see as much as an 80-point improvement to their VantageScore.

Consumers with prior delinquencies could also see score improvements from adding rent and utility accounts to their file, according to the study.

Additionally, some consumers can’t even get a credit score because they have too little information in their files. The study found that some now can based largely on the data from one or more rent or utility accounts.

“Lenders are re-examining their underwriting processes to make lending decisions more precise, profitable and inclusive,” says Silvio Tavares, President & CEO of VantageScore. “This research confirms that increased reporting of rent and utility payments can help.”

The results of the study are detailed in a whitepaper that can be downloaded titled, “The Advantage of Adding Rent and Utility Data to the Credit File.”

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Scott Rivelli

Scott Rivelli

Realtor Associate

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