Findings

The Congress finds the following: (1) Using alternative data in mortgage lending (either through alternative credit scores or in underwriting) has the potential to increase access to credit for individuals with little or no credit history with the national credit reporting agencies (NCRAs), according to a review of alternative data use in mortgage lending by the Government Accountability Office in December 2021. (2) Approximately 32 million consumers do not have any credit history with the NCRAs or did not have enough credit history to be scored, according to a 2025 report by the Bureau of Consumer Financial Protection (CFPB). The CFPB also reported that this population disproportionately included low-income consumers, younger consumers, and consumers of color. (3) The use of alternative data to establish a low- or moderate-income borrower’s credit history for the purpose of extending mortgage credit can help lenders meet goals of the Community Reinvestment Act. (4) Mortgage underwriting systems that allow lenders to use consumer-permissioned alternative credit information may help expand access to mortgages for borrowers with lower credit scores and communities of color. On September 21, 2021, Fannie Mae updated its automated underwriting system so that it notifies lenders that a borrower may benefit from the inclusion of consistent rental payment information, and with the consumer’s permission, the underwriting system will automatically identify positive rental payments within bank statement data and include this in its credit assessment. According to a fair lending and credit risk analysis by Fannie Mae and the Federal Housing Finance Agency, the populations most likely to benefit from this change are applicants with lower credit scores, who are disproportionately consumers of color.