Credit scores

The S&P 500’s financials sector drops more than 3%; former Amex chief’s venture capital firm is backing a credit scoring company.

It’s not just weaker underwriting and higher household debt levels that are driving past-due rates to their highest levels in seven years.

Traditional credit scoring is under siege from alternative underwriting, and TransUnion is joining the future by investing in other emerging trends such as mobile device security and health care payments.

Mark Begor said Wednesday that banks and other customers will receive regular updates on the credit reporting agency’s efforts to improve its cybersecurity in the wake of last year’s massive data breach.

Supporters say pending legislation would help consumers with little or no credit history. But the bill would instead roll back key consumer protections.

The annual progress report on the Fannie Mae and Freddie Mac conservatorships reiterated that a new credit score model will likely not be operational until after the implementation of a new Single Security Initiative.

The team that founded marketplace lender Avant Inc. raised about $15 million to start a firm that will use blockchain technology and digital tokens to motivate companies to share data about customer identities and credit worthiness.

Use of alternative data in traditional credit scoring would help consumers access the banking system and lower their cost of credit.

A former senior executive at Equifax Inc. was criminally charged for allegedly selling almost $1 million worth of shares before the company’s announcement last year that it had suffered a massive data breach.

A late addition to regulatory relief legislation would direct the Federal Housing Finance Agency to review credit-scoring alternatives, but some say the provision is redundant.