For the last few years, those wanting to buy a home simply had to have their FICO score taken and evaluated.  For some, limited analysis was given to income, assets, job status, potential equity, recent credit habits, and other factors which could predict the likelihood of a borrower to pay his bills on time.

Now, with loan defaults and foreclosures continuing to rise, many lenders are looking to a few old-time indicators of credit behavior.

Fair Isaac, creator of the FICO Score, is beginning to add predictive behavior like bad-check writing, and utility bill payment history, into their credit screen formula.  Experian and TransUnion, two of the major credit bureaus in the U.S., are beginning to do the same.

In the glory days of the sub-prime loan, these more detailed analyses were reserved for those with limited credit and payment histories.  The goal, at that time, was to expand the pool of potential borrowers to those who may have been recent immigrants, or traditionally paid with cash.

Today, the broader use of these kinds of indicators provides extra assurance for lenders who are considering extending credit to all but the top-cut of borrowers.

Underwriting standards continue to tighten, folks - for us, and our clients.

Please see our post today at BlogChicagoHomes.com, with links to Jane J. Kim's article in the March 30th edition of The Chicago Tribune, for more information.

DEAN & DEAN'S TEAM CHICAGO