Alternative Credit Scores – That Ignore Credit

Measuring credit by not measuring it

Just when we thought the crazy train could not pick up any more speed – Congress starts pushing the idea that Fannie and Freddie should change the model they use to evaluate the credit worthiness of borrowers.

Of course, when you read what you want to do, you realize that they want to de-emphasize actual credit issues and focus on payment history. There is an important difference since what they suggest is basing credit scores and lending decisions on whether or not you pay your power bill on time… or your rent. Ideas that to my mind, really tell you nothing about whether or not that person is a good credit risk.

We will also talk about the latest building numbers – which are not horribly encouraging.

This weeks poll!

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