Santa Ana, Calif.-based CoreLogic and Minneapolis-based FICO have jointly introduced a consumer credit risk score that is designed to improve lending decision quality and increase the number of mortgage loans lenders make.
According to the companies, the new FICO Mortgage Score Powered by CoreLogic evaluates the traditional credit data from the national credit data repositories and the unique supplemental consumer credit data contained in the CoreLogic CoreScore credit report to deliver a more comprehensive and accurate view of a consumer's credit risk profile for loan prequalification and origination. The new scoring model was designed specifically to predict mortgage loan performance and has shown a substantial improvement in risk prediction over other generally available risk scores in use today.
As a result, this new scoring model, developed by FICO to leverage data only available on the CoreLogic CoreScore credit report, will help mortgage lenders more safely and profitably expand their origination volumes, ultimately strengthening and growing the overall mortgage lending market, the companies add.
‘In this complicated operating environment, lenders are increasingly turning 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. ‘Today, we are announcing an industry first – a new composite, multi-bureau credit score generated from both traditional credit data and CoreLogic supplemental data, expanding the applicant credit spectrum by including property transaction data, landlord/tenant data, borrower-specific public data and other alternative credit data. 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.’
‘The new FICO Mortgage Score is designed especially for prequalification and origination and delivers increased insight when it matters most,’ says Joanne Gaskin, senior director of scores product management and mortgage practice leader at FICO. ‘For many lenders, the increased predictive lift will translate into thousands of new mortgages, and the avoidance of millions of dollars in bad loans and associated costs. This innovation is a win-win for lenders and consumers alike.’