SAN FRANCISCO (KGO) --New credit reporting guidelines announced Tuesday could make it easier for people to buy a home.
Transunion is one of three major credit reporting agencies that gathers the data, which goes into your credit report. Under the new rules, many scores of prospective homeowners will be going up.
Lucia Obregon, 26, like other Bay Area residents dreams of one day owning a home. "Somewhere where I could garden, I would prefer a smaller cozier house rather than this big luxurious house," she said.
She would prefer somewhere in the Mission District where she can be close to the Latino community.
Obregon is in the age group most likely to benefit from changes in how Transunion credit scores are determined.
Transunion announced its taking its cue from Fannie Mae and will start compiling scores based on 30 months of credit history.
"Compare that to a traditional credit report that essentially refers to a consumer at a point of time," Transunion spokesperson Nina Verma said.
People such as Lucia who are burdened with thousands of dollars of student loans will benefit.
Housing counselor Juan Diego Castro of the Mission Economic Development Agency explains. "Young people benefit the most because they're coming out of school with huge loans, with high interest rate loans, so they'll benefit," Castro said.
By looking at their credit history over a longer period of time, they have the opportunity to lower their debt-to-income ratio and increase their credit score. "As small as it may be, it goes a long way when you live in an expensive city like San Francisco," Obregon said.
Transunion is predicting the change will increase the number of new home buyers in the next five years by almost 30 percent to 17 million.
And that she says will stimulate the economy. "They're buying homes from somebody else. Now, these people move on to the next home or the bigger home of the vacation home," Verma said.
Castro who has been counseling Obregon on purchasing her first home predicts good things for his client.
Transunion predicts 21 percent who are part of this new scoring idea will see higher credit scores, while only 11 percent will see lower scores.
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