Mortgage lenders will soon have access to new details about a prospective borrower’s past — such as past rental applications, inquiries to pay-day lenders, and missed child support payments — that will be factored in to a new credit score.
Real estate and mortgage data aggregator CoreLogic says it’s signed an agreement to work with Fair Isaac Corp., the owner of the widely used FICO score, to develop new credit risk scores for the U.S. mortgage industry.
Much of the data CoreLogic collects on consumers hasn’t been available from traditional credit reporting agencies but is important to mortgage lenders, the company said.
CoreLogic says it will serve as a "supplemental credit repository," augmenting data provided by TransUnion, Equifax and Experian with property ownership and mortgage obligation records, property legal filings and tax payment status, rental applications and evictions, inquiries and charge-offs from pay-day and online lenders, and consumer-specific bankruptcies, liens, judgments and child support obligations.
The Santa Ana-based company will generate a CoreScore Credit Report for lenders to alert them to bad debts that might previously have gone undiscovered. The reports may also help some consumers by identifying previously hidden credit history that reflects well on them, the company said.
CoreScore consumer information will be "instantly merged" with traditional credit report data "in a single, integrated report only available from CoreLogic," the company said in announcing the new reports last week.
At that time, it was unclear whether the CoreScore reports would also be used to calculate borrower’s FICO scores.
Today, CoreLogic and Fair Isaac announced that they plan to offer mortgage lenders a "credit scoring solution" that will combine data from CoreScore reports with Fair Isaac’s FICO 8 Mortgage Score. That product will serve as the basis for future solutions that "deliver additional loan level insight and support more intelligent and consistent lending decisions," the companies said.
A spokeswoman for CoreLogic told Inman News that the FICO 8 Mortgage Score "will likely be an input" to a new score that will be provided along with the CoreScore Credit Report. There are no plans to update the FICO 8 Mortgage score itself to use the additional CoreLogic data, she said.
So lenders purchasing services from CoreLogic Credco will get back two scores: The score or scores they use for decisions today, such as the FICO 8 Mortgage Score or classic FICO score, plus a new score that uses the value of FICO 8 Mortgage Score and the CoreScore data.
"By blending the unique data from CoreLogic with the analytic expertise of FICO, we will be able to deliver a new and more predictive credit score with our recently launched CoreScore Credit Report," said Tim Grace, senior vice president of Product Management and Analytics for CoreLogic, in a statement. "Together, this new credit report and credit score will provide the mortgage industry with increased visibility into consumer credit behavior and improved credit risk analysis."