By Michele Bodda, President Employer Services, Verification Solutions and Housing at Experian
Credit scores feel like a simple thing because we’ve been taught to treat them that way, a three-digit number that opens doors or closes them. But credit scores don’t exist on their own. They are downstream of something far more fundamental: credit data. Without the information in a credit report, there is no score at all. That distinction matters, especially now, as the mortgage industry finds itself at another inflection point.
At its core, Experian is a data and technology company. The role it plays in the financial system is to collect, protect, and maintain the integrity of the data that makes lending decisions possible. A credit report reflects a consumer’s financial behavior over time: accounts opened, balances carried, payments made or missed, inquiries, and patterns that tell a much richer story than any single number ever could. A credit score, by contrast, is simply the output of an algorithm (math applied to that data at a specific moment in time). That number is useful, but it is also inherently limited. It is a snapshot, not a biography.
What’s striking is how little the core mechanics of mortgage credit scoring have changed relative to how dramatically consumer financial behavior has evolved. The primary score model used in mortgage decisioning today has been around for decades, long predating mobile banking, streaming subscriptions, gig income, Buy Now Pay Later (BNPL), or even widespread online bill pay. Meanwhile, consumers’ lives have become more complex, more digital, and more data-rich. For years, the industry continued to compress that reality into the same narrow framework, not because it was optimal, but because it was familiar.
That is beginning to change, and the change is long overdue. Competition, research, and better data are finally pushing the system forward. We are simply better at measuring creditworthiness than we were in the past. Expanded data (e.g., rent payments, utility bills, cash flow insights, and other recurring obligations) offers a more accurate view of how people actually manage money. It captures responsibility that didn’t exist or was previously invisible.
That matters deeply when you look at renters and the future of homeownership. Our recent research shows something encouraging: nearly half of renters believe they will be ready to buy a home within the next four years, and that optimism rises meaningfully when they look further out. Younger generations, particularly Gen Z and millennials, still aspire to homeownership. They want it. They are realistic about the challenges (affordability, down payments, and credit scores loom large) but the aspiration itself remains intact. More than half of renters see low credit scores as a major barrier, even when their day-to-day financial behavior might suggest otherwise.
This is where modernization becomes not just a technical upgrade, but a responsibility. Paying rent on time is one of the strongest indicators of readiness for homeownership, yet historically it was not consistently reflected in mortgage credit decisions. That omission was not about risk; it was about limitations in the data and models being used. Newer scoring models, like VantageScore 4.0, change that by incorporating rental payment history and other expanded data points that better reflect real-world financial behavior. This isn’t about replacing one score with another. It’s about choice; giving lenders better tools to manage risk responsibly while expanding access to credit.
Expanded data goes beyond rent. Tools like Experian Boost allow consumers to receive credit for bills they already pay (i.e., utilities, mobile phones, streaming services, etc.) bringing visibility to responsible behavior that was previously ignored. Cash flow insights offer lenders a clearer view of income stability, expenses, and reserves, improving risk assessment in meaningful ways. Research shows that incorporating these insights can materially improve model accuracy and differentiation, which benefits both lenders and borrowers. Even areas that have raised concern, like BNPL, are being addressed with more transparent reporting frameworks designed to inform lenders without unfairly penalizing consumers.
Of course, no conversation about credit is complete without addressing cost. Credit report pricing has become a flashpoint, but much of the frustration stems from confusion. Credit bureaus do not set the total price lenders pay for tri-merge reports. Those costs reflect a combination of score algorithm royalties, reseller fees, technology platforms, compliance infrastructure, and yes, credit data. Labeling all of that simply as “credit report costs” obscures what is actually driving price changes. At the same time, bureaus operate under intense regulatory oversight because the accuracy and security of this data are foundational to the stability of the financial system. That stewardship carries real cost and real responsibility.
The bigger picture, though, is not about fees or models. It’s about alignment. Consumers have not stopped believing in homeownership as a path to stability and generational wealth. What has lagged is the system’s ability to reflect how people actually live and manage money today. For too long, the industry has relied on a single, narrow lens to judge creditworthiness. Now we have better data, better tools, and better models; ones that are more predictive, more inclusive, and more grounded in real behavior.
The lenders who lean into this shift will not just approve more loans. They will earn more trust. They will meet consumers where they are instead of forcing them into outdated boxes. And in doing so, they will help turn today’s renters into tomorrow’s homeowners... not by lowering standards, but by measuring reality more accurately. That is progress with purpose, and it is how the future of housing credit should be built.