Guild Mortgage offers new means to measure creditworthiness

Growth-oriented mortgage company Guild Mortgage has introduced a new program that offers an alternative method of measuring credit risk for borrowers, providing a more inclusive path to homeownership.

Complete Rate, a program powered by FormFree, allows those with no credit score or credit history to opt in for a free assessment. FormFree’s proprietary analysis of bank transaction and balance data is retrieved directly from financial institutions with consumers’ explicit consent. If the borrower’s FormFree report shows consistent rent payment and good residual income history, they may qualify for a lower interest rate, lower fees, or both.

Most lenders would use a borrower’s credit score to determine interest rates and fees, typically charging borrowers without a credit score higher fees or rates. However, studies from the Consumer Financial Protection Bureau show that 19% of adults in the United States do not have traditional credit scores – including those with thin score files that make generating a current, apt credit score impossible – while an additional 11% are considered “credit invisible” because of a lack of credit file with any of the three major credit bureaus, Equifax, Experian, and TransUnion.