The New Mortgage Credit Score
Leading real estate analytics company CoreLogic has partnered with Fair Isaac Corporation (FICO) to develop a new mortgage credit score that both companies say will make more people eligible for mortgages. The new score takes into consideration previously unused consumer data when deciding mortgage eligibility.
It’s called the FICO Mortgage Score Powered by CoreLogic and is said to have shown considerable improvement in risk prediction when compared to other scores. From Yahoo!:
The report includes information that other credit reporting agencies, such as Experian, TransUnion and Equifax, don’t factor into your traditional reports. If you were late on child support payments, applied for a payday loan or had trouble paying your rent on time, it could show up on your CoreScore Credit Report and be factored into your new FICO mortgage score. But on-time payments on a second mortgage will also be factored into your score, as well as all those months you paid your rent like clockwork. It’s not intended as a replacement for traditional FICO scores, but as another tool for mortgage lenders to use early on, at the prequalifying stage for borrowers.”It’s simply bringing in additional data,” says Joanne Gaskin, a director of product development at FICO.
Critics think that the score will unfairly harm some consumers. But take heed: in today’s lending environment, tools such as these are likely to find their way to your local mortgage lender. For more information about the new mortgage credit score, this article by Kelly Dilworth on Yahoo! is pretty balanced.