House-shoppers, take note: FICO recently announced that it is rolling out a new credit score specifically designed to capture the rent/mortgage history of a consumer, which banks will use to determine the eligibility of an applicant to take out a home loan. What will they think of next? FICO makes it clear that this score is not meant to replace the regular credit scores through Experian, TransUnion, and Equifax but rather to include information that these three other credit bureaus don’t, which banks might want to know about before granting a loan. Kelly Dilworth of Fox Business reports:
“A new FICO mortgage credit score unveiled Tuesday casts a wider net to capture consumer behavior not previously considered in whether to grant a home loan. The agency says it will make more people eligible for a mortgage, but critics say that wider net may pull in new inaccuracies and create additional privacy concerns.
On July 10, the consumer credit score giant FICO joined with data firm CoreLogic in announcing the new score designed specifically for mortgage lenders called the FICO Mortgage Score Powered by CoreLogic. The mortgage score is based on information provided by CoreLogic in a detailed report called the CoreScore Credit Report.
The report includes information that other credit reporting agencies, such as Experian, TransUnion and Equifax, don’t factor into your traditional reports. If you were late on child support payments, applied for a payday loan or had trouble paying your rent on time, it could show up on your CoreScore Credit Report and be factored into your new FICO mortgage score. But on-time payments on a second mortgage will also be factored into your score, as well as all those months you paid your rent like clockwork.”
So if you’re gearing up to buy a house, or just beginning your hunt, it might be worth your while to get more information about this new credit score, and give yours a check to make sure it’s solid. FICO is claiming that the new credit score will probably make more people eligible for a loan, but that of course is assuming you’ve been keeping up on things like your rent and child support payments. I can see FICO’s new tag-line for the new credit score: in the words of Jerry Maguire, “Help me help you!” Make timely payments, keep up on your rent, and you just might reap the benefits of the new system.