A growing number of would-be homebuyers prefer lenders that incorporate rent and utility payments into credit assessments, marking a significant change in mortgage underwriting expectations, especially among younger consumers.
Experian says a growing share of would-be homebuyers are paying attention to how lenders judge credit, with one-third of consumers saying they would look for another mortgage provider if their current lender relied on older scoring models that do not include rent and utility payments. The credit data company said the finding points to a broader shift in borrower expectations as more people want their everyday payment history recognised in mortgage decisions.
The research suggests that wider use of rent and utility data could affect demand for home loans as well as lender competition. Experian said 52% of consumers would be more interested in buying a home if those recurring payments were considered alongside traditional credit information. Interest was strongest among younger adults, with 76% of Gen Z respondents saying the scoring model used by a mortgage lender would influence whether they stayed with that provider or switched.
That push for broader underwriting comes against a longer backdrop of industry efforts to expand access to credit. Experian has previously argued that rental data can help people with thin or limited credit files become scoreable, while a 2022 study with Oliver Wyman said expanded data could improve access for millions of consumers who are credit invisible, unscoreable or stuck with subprime scores. Separate research from the Urban Institute found that including rental history in scoring can raise the share of people with a credit file and help some borrowers move into better risk categories.
The latest announcement also aligns with a wider regulatory move towards modern scoring models in mortgage lending. Experian said the Federal Housing Finance Agency is continuing its transition to newer models that can consider alternative data, such as rent and utility payments. The company also highlighted a recent pricing move intended to lower the cost for lenders adopting VantageScore 4.0, though it did not say how quickly the market is likely to shift away from older methods.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
