UWM Holdings to Default to Best Credit Score for Every Borrower

Seeking Alpha··US·Read original
2▲1 ▼2Impact / 5
Summary · why it matters

UWM Holdings said Tuesday it will automatically select the best credit score for each consumer by obtaining both FICO Scores and VantageScore 4.0 on all credit pulls, rather than relying on a single credit rating firm's score. "Our goal is simple: put borrowers in the best possible position while making it easier for brokers to do business," said UWMC President and CEO Mat Ishbia. The company said brokers will not have to navigate the nuances between scoring models because UWM will default to the strongest qualifying score available, helping borrowers receive the best possible outcome while creating a faster, more seamless experience for brokers. The FICO score is calculated by Fair Isaac, while VantageScore 4.0 is a competing model from TransUnion, Experian, and Equifax. UWM Holdings stock dropped 6.6% in regular-hours trading, while FICO rose 0.8%, TransUnion slipped 0.7%, and Equifax ticked down 0.1%.

Impact on assets 5

Cybersecurity & Digital Trust▼
Equifax Inc
EFX
▼ NegativeCompetitionrelevance

UWM will pull both FICO and VantageScore 4.0, potentially reducing reliance on Equifax's single-score model as the default.

TransUnion
TRU
▼ NegativeCompetitionrelevance

UWM's dual-score pull could dilute VantageScore 4.0's advantage as the sole alternative to FICO, pressuring TransUnion's scoring model.

Financials▲
UWM Holdings Corp
UWMC
± MixedCompetitionrelevance

UWM will default to the best credit score for borrowers by pulling both FICO and VantageScore 4.0, a product/process change whose net effect is unclear.

Artificial Intelligence▲
Fair Isaac Corporation
FICO
▲ PositiveCompetitionrelevance

UWM will obtain FICO Scores alongside VantageScore 4.0, keeping FICO in the credit-pull process despite the competing model.

Cloud & Digital Infrastructure▲

Off-coverage companies 1

VantageScore Solutions, LLCi
Private± Mixedrelevance