The Federal Home Loan Bank of Chicago is working with VantageScore to allow its member financial institutions to pledge mortgage collateral using VantageScore credit scores, serving as an alternative to the FICO credit score model.
VantageScore considers rental payments and other consumer credit data in its scoring algorithms that are not included in traditional scoring models. This partnership provides an innovative solution aimed at expanding access to support sustainable homeownership.
“FHLBank Chicago products and practices work to bridge the gap to homeownership for borrowers in our members’ communities across Illinois and Wisconsin,” Michael Ericson, president and CEO, FHLBank Chicago, said. “I am proud of our partnership with VantageScore and the progress we are making to drive financial inclusion and equitable access to mortgage lending in our district.”
VantageScore estimates that using their credit model will result in approximately 33 million more consumers nationwide having access to a credit score. That, in turn, may help them in obtaining a mortgage. This includes an estimated 2.4 million consumers within the FHLBank Chicago’s district of Illinois and Wisconsin.
“We are pleased to be a part of the FHLBank Chicago’s efforts to address housing affordability and better serve their members,” Anthony Hutchinson, SVP of Industry and Government Relations at VantageScore, said. “VantageScore’s innovative credit-score models score more people, which makes a significant impact in addressing the potential disparities that exist in mortgage lending. Working with FHLBank Chicago, we can help reduce the homeownership gap in America.”
This is part of FHLBank Chicago’s multi-year commitment to promote homeownership and increase affordable housing supply.