New Experian data shows one in three consumers would switch lenders over outdated scoring models
One in three American consumers say they would actively seek out a new mortgage lender if they discovered their current one relied on legacy credit-scoring models — those that exclude rent and utility payments from their calculations.
The finding, drawn from a new Experian survey of 2,000 adults conducted by Atomik Research between July 16 and July 21, puts the industry on notice: the modernization of credit underwriting is no longer just a regulatory checkbox. It is a customer retention issue.
The research arrives as the Federal Housing Finance Agency's (FHFA) shift toward modern credit scoring models is already reshaping how lenders evaluate borrowers.
In April, Fannie Mae and Freddie Mac updated their selling guides to accept VantageScore 4.0 immediately, giving lenders a path to use scores that incorporate rent and utility payment data in their credit assessment.
According to Experian, more than half, or 52%, of consumers said they would be more interested in pursuing homeownership if lenders considered that kind of additional payment history in their mortgage applications.
Read more: FHFA’s VantageScore adoption is a win, but implementation will take time: executive
Gen Z raises the stakes for credit model adoption
The generational dimension of this finding may be the more pressing signal for originators. Gen Z now accounts for nearly one in five purchase mortgage rate locks, according to Intercontinental Exchange's July Mortgage Monitor report. This cohort is paying close attention to how lenders evaluate them.
Three in four Gen Z consumers over 18 told Experian the type of credit scoring model a lender uses would influence whether they stayed or switched.
Nearly two-thirds, or 62%, are already aware that mortgage lenders are transitioning to newer models incorporating rent and utility data. And 48% expect to be in a position to buy within four years.
"We've long advocated for the use of expanded data, including things like rent and utility payments, to help increase access to homeownership," said Michele Bodda, President of Experian Housing, Verifications Solutions and Employer Services.
"As Gen Z becomes a larger share of the mortgage market, mortgage lenders have an opportunity to differentiate themselves by embracing expanded data and modern scores that support more comprehensive credit evaluation while making the dream of homeownership a reality for more consumers."
The view from the broker channel has been consistent. Risha Kilaru of OriginPoint, a Northern California-based mortgage professional, previously told Mortgage Professional America that the barriers for younger buyers are often more about readiness than desire, a readiness gap that improved credit visibility could directly address.
Read more: Half of new grads move home as Gen Z redraws the path to ownership | Mortgage Professional
A $1 trillion opportunity hiding in plain sight
Independent research from VantageScore found that VantageScore 4.0 can identify nearly five million additional mortgage-ready consumers compared with legacy mortgage scoring approaches, representing an estimated $1 trillion in potential mortgage originations.
To drive adoption, Experian has announced $0.99 pricing for VantageScore 4.0 for mortgage originations, a move that builds on its previously announced Score Choice offering providing access to VantageScore 4.0 at no additional cost when lenders obtain a FICO Score.
For brokers navigating a market where credit reporting costs have become a growing pressure point, the pricing move lowers a meaningful barrier to modernization.
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