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New Credit Score Provides more Insight into Consumers’ Financial Behavior

Posted on December 12, 2011

A new credit scoring system is being developed that aims to create a more complete depiction of a consumers financial standing, which will include payday loan applications, rental payments in collection and judgments for child support, phone bills, property tax liens, and utility bills, among many others.

CoreLogic, which was founded 1991, introduced the CoreScore credit report earlier this month as a means of giving lenders an opportunity to make better informed lending decisions, with the actual score coming in March of 2012.

All of the information included in CoreScore is publicly available which the major credit bureaus typically overlook as trivial or too complicated to track. Critics are saying that this new scoring could adversely affect low-to-mid income consumers’ ability to borrow and even find a job.

CoreLogic has teamed up with FICO, which has been tweaking the formula of their credit score to accommodate the extra financial information, which is also expected to be able to predict how a consumer would act with different loan terms.

Under the Fair Credit Reporting Act, CoreLogic is required to provide a yearly free credit report through the federally mandated

It’s projected that nearly 100 million Americans will have the new credit report, which is about half of how many people have reports for the three bureaus, Experian, TransUnion and Equifax, and is not expected to replace the credit reports available today.

Mortgage lenders will undoubtedly utilize this new score and CoreLogic won’t have a problem selling it because many mortgage companies have been getting information from them for years.

Consumers are encouraged to pay all bills on time and work toward eliminating debt if they wish to avoid being penalized by the credit bureaus. The exact ramifications of this new scoring are yet to be seen, but intends to explore them as they become clearer.

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