The latest credit scoring product, the FICO® 8 Mortgage Score, is now available from all three major U.S. credit reporting agencies.
The FICO® 8 Mortgage Score was built specifically to help mortgage lenders better predict mortgage performance and improve credit decisions for both current and prospective homeowners. The score analyzes the full credit history on file to deliver significantly sharper assessment of mortgage repayment risk, and aids servicers in earlier identification of borrowers at risk so they can mitigate the incidence and high cost of foreclosure.
Why did the Credit Reporting Agencies add this new product?
"To do the best job of evaluating risk and increasing profits, lenders need updated credit scoring analytics that incorporate mortgage credit performance since the subprime mortgage meltdown," said Craig Focardi, senior research director at TowerGroup. "The availability of mortgage credit scores across all three credit reporting agencies will enable lenders to upgrade their loan underwriting and account management practices."
What exactly is the FICO 8?
The FICO® 8 Mortgage Score retains the same 300-850® scoring range, minimum scoring criteria, authorized user and inquiry treatment as the general-risk FICO® 8 Score. To achieve its significant increase in predictive strength, FICO Mortgage Score assesses several additional data variables from consumer credit files to specifically predict mortgage repayment risk. Accordingly, FICO Mortgage Score includes additional score reason codes compliant with the Fair Credit Reporting Act that help lenders understand and explain the scores to applicants.
More info here:
http://www.fico.com/en/Company/News/Pages/10-26-2010.aspx
Regina P. Brown
CA Real Estate Broker #00983670
Comments (3)Subscribe to CommentsComment