Credit Score for Mortgage Lenders Will Get “Revamped” Formula
CoreLogic, a real estate and mortgage data aggregator, has announced an agreement to work with Fair Isaac Corp. (FICO) in order to develop “new” and “improved” credit risk scores designed especially for the U.S. mortgage industry.
The data collected by CoreLogic can be used by FICO to come up with credit score formulas that will integrate additional details from a borrower’s financial history into a newsscore.
These details include inquiries to pay-day lenders, past rental applications, past rental evictions, property ownership and mortgage records, tax payment status and property legal filings. Bankruptcies, judgments, liens and child support obligations that are consumer-specific will be added by CoreLogic as well.
CoreLogic says it will supplement the data already provided by Equifax, TransUnion and Experian with data that is related to property and mortgage concerns.
Mortgage lenders will then get two scores: one using the traditional FICO 8 Mortgage Score and a new score with integrated data from CoreLogic and the FICO 8 Mortgage Score.
The credit scores provided that will be supplemented by CoreLogic effectively become a double-edged sword for borrowers. Some will benefit from the added factors while others will suffer from them, although the system will definitely be a boon for those that responsibly handle all their financial and real estate obligations.