All three major U.S. credit reporting agencies are now offering a new FICO score from Fair Isaac Corp. that’s specifically designed for prescreening, originating and servicing mortgages, the company said.

The FICO 8 Mortgage Score does a better job identifying accounts that are overdue by 90 days or more, pushing more high-risk borrowers into lower score ranges, the company says in promotional materials.

The FICO 8 Mortgage Score uses the same 300-850 scoring range as the all-industry FICO score most widely used, but is better at predicting whether a borrower will default on a mortgage, the company says.

The score can be used not only by mortgage originators to assist in underwriting decisions, but by loan servicers to spot borrowers who may be at risk of foreclosure.

Consumers without a mortgage or home equity line of credit (HELOC) can be scored using "mortgage-related characteristics" determined by analyzing the credit histories of consumers with mortgages.

The FICO Mortgage Score provides additional reason codes that help lenders understand and explain the scores to applicants as required by the Fair Credit Reporting Act.

FICO 8 Mortgage Scores can be used in conjunction with the FICO Economic Impact Service, which helps lenders tighten or loosen credit policies ahead of ups and downs in the economy based on forward-looking modeling.

A recent analysis by Zillow showed most Americans have credit scores that are too low for them to qualify for the best rates on a mortgage, and nearly one in three are unlikely to get a loan on any terms.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription