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How Data is Helping Buyers Get in on the Ground Floor of Today’s Housing Market

How Data is Helping Buyers Get in on the Ground Floor of Today’s Housing Market

Today’s economic realities have made first-time home buying a daunting prospect. Faced with low inventory and rising interest rates, many consumers are struggling to prepare for today’s unique buying process. First-time buyers who have poor credit health or short credit histories find it even more challenging to become a homeowner. Fortunately, fintechs have seen an opportunity to step in with accessible tools that can help consumers start, progress and complete their journey to home-ownership while furthering financial inclusivity as part of the mortgage process.

FinLocker, a financial fitness and home-ownership app, is utilizing alternative sources of consumer financial data, including bank account transactions that show on-time rent and utility payments, to help potential homeowners obtain credit and enhance mortgage eligibility. This type of financial information has become more readily accessible to companies with which consumers have an existing relationship due to the move toward open banking in the U.S.

Open-banking initiatives enhance data and information access, leading to enhanced credit product access for consumers. Open banking facilitates the sharing of consumer financial data that can complement conventional credit scoring and models with data sources that include employment stability, cash flows and net income, addressing structural imbalances that have historically limited availability to credit.

These advances also help improve financial literacy and empower consumers to monitor and control who has access to their financial data. Through partnerships, fintechs are incrementally preparing consumers to succeed in the home buying process by providing personalized advice from a trusted source that is relevant to consumers’ financial circumstances. This requires providing tools that educate prospective buyers on the importance of checking their credit reports, paying bills on time and lowering their credit utilization rate to improve their credit health. For example, by integrating AllData Aggregation from Fiserv within its analytics infrastructure, FinLocker enables users to easily access the data in multiple financial accounts to make informed financial decisions and obtain financial resources and advice in one place.

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Increased sharing of consumer financial data, coupled with advances in artificial intelligence technology, is leading to timely, personalized advice that, in the long-run, will help consumers understand their options, achieve home-buying readiness and maintain long-term financial well-being. Contextual advice could even prevent consumers from incorrectly self-selecting out of the mortgage market, or help consumers gain access to and understanding of money management and home-ownership tools at an earlier age.

New technology can also further the use of newer data sources like streaming subscriptions and mobile device access to augment historical credit score models. This type of data use can help address credit score disparities for individuals and families that have thin files for low traditional credit scores. The standardization and sharing of data through open banking is crucial to enabling alternate credit decisioning, driving inclusion in the housing industry and increasing equitable wealth building.


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