New mortgage credit score unveiled

This article came out last week and I thought it was important to share:

New mortgage credit score unveiled SANTA ANA, Calif. – July 11, 2012 – Traditionally, the same consumer credit scores are used to approve mortgages, credit cards and car loans. However, a new mortgage credit score – a joint venture of CoreLogic and FICO – takes more data into consideration in order to “improve lending decision quality and increase the number of mortgage loans lenders make.”

The new FICO Mortgage Score Powered by CoreLogic starts with traditional credit score data but it adds in supplemental data found in the CoreLogic CoreScore credit report introduced last year to generate a final mortgage-reliability score.

FICO says it created the new scoring model specifically to predict mortgage loan performance, and that it has shown a substantial improvement in risk prediction compared to other scores. And if lenders believe they can rely on the score, FICO reasons, they’ll make more loans.

“In this complicated operating environment, lenders increasingly turn to new data sources to help better interpret a consumer’s credit risk, so that more loans can be approved while mitigating potential losses,” says Tim Grace, senior vice president of product management at CoreLogic. “For a top-20 lender processing 300,000 applications a year, adopting this new score could translate into 3,900 more loans approved every year, along with a net financial benefit of $14.5 million.”

© 2012 Florida Realtors®

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Posted on July 16, 2012, in Finance and tagged , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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