Does the Current Reliance on Credit Scores Deny Deserving Applicants?
Posted by Matthew Brian Hersh on December 6, 2011
Last week, we asked readers if credit scores were too much of a driver in home loan approval. You answered overwhelmingly that yes, credit scores prevent often worth applicants from receiving loans, and that while scores can provide some useful information, they should not be the only tool in a lender’s tool box.
See selected reader comments at the jump, and then take this week’s poll: “Is there a third place in your community that serves as a cultural and social center?”
“Some borrowers have dinged credit scores due to one-time emergencies but could otherwise be good credit risks. Credit scores should be a factor in underwriting, but not one so primary as it is today.”
“Credit scores are an imperfect tool and there are good arguments to be made for additional flexibility. But ultimately, credit scores are still one of few tools that can be used to evaluate a person’s history.”
“Low credit scores are disproportionately located in communities of color and may reflect lack of access to opportunities to build good credit.”
“There is often inaccurate information on a credit report where a borrower could have a good payment history for several years but due to the seven-year requirement it could be years before a negative item is removed from that borrower’s credit report.”