The alternative credit scoring model VantageScore would not increase access to credit, says Joe Smith, the former monitor for the 2012 national mortgage settlement.
Calls for less reliance on credit bureaus and Social Security numbers for verification are leading many to envision a future of identity on a distributed ledger.
The Equifax breach has millions of Americans now thinking about freezing their credit to guard against identity theft. But those who act could be cutting themselves off from the nation's vast credit economy.
Sen. Elizabeth Warren, D-Mass., called for bipartisan action against Equifax during a Senate floor speech on Tuesday, criticizing the credit bureau for waiting several weeks after a massive data breach to reveal it to the public.
Efforts to persuade regulators to allow Fannie Mae and Freddie Mac to use alternative credit scores would stifle competition between the credit bureaus and FICO and do little to expand access to credit, according to industry analyst Chris Whalen.
Rep. Carolyn Maloney, D-N.Y., sent a letter to the top executives at TransUnion and Experian on Wednesday asking them what steps they are taking to safeguard consumer data in light of the Equifax breach.
Large banks have scaled back lending as competition has intensified and credit unions and financing arms of car manufacturers are picking up the slack.
The credit bureaus will change the way they include information about tax liens and civil judgments in credit reports. This could spur lenders' use of alternative credit data.
The Consumer Financial Protection Bureau said Experian sold consumers an "educational" credit score and falsely claimed in advertisements that the score was used by lenders to make credit decisions.
