Fed questions US credit scoring system

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May 29, 2021

Fed questions US credit scoring system—here's what that means for issuers.

The Federal Reserve Bank of New York said credit scoring systems may have become less reliable during the pandemic as a result of COVID-19 relief programs.

Alternative financial health measures could gain steam if credit scoring loses ground. JPMorgan and Wells Fargo are reportedly planning to share customers' account deposit data to determine creditworthiness as part of a government-backed initiative.

As the movement against using credit scores as a financial health measurement builds, these sorts of initiatives can gain traction by providing a more accurate and well-rounded depiction of a consumer's financial situation while extending credit access more equitably.

Insider Intelligence's Adriana Nunez has the full story.

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