The calculation of your credit score already includes numerous details about your financial life, such as how much credit you have available to you, how much of that credit you are using, and the number of late payments made on your credit accounts over the past few years. Now, there is a new credit score that allows creditors to access to financial information that never appeared on your credit report before. This new credit score may help some borrowers by including more positive information for creditors to review, but it may also hurt some borrowers that will have more negative information exposed.
CoreLogic has introduced a new form of credit file that includes many different types of consumer data that was not evaluated by the major credit bureaus before. This data includes such items as information on missed rental payments that have been sent to collections, evictions, child support judgments, and payday loan applications. The information included in this new credit file may also include property tax liens, defaults on homeowner association dues, and whether your home is underwater.
The company says that the new type of credit file is designed to provide lenders with a more complete picture of a potential borrower’s financial situation and whether the borrower will be able to repay their debts. CoreLogic has already formed a partnership with FICO to create a new consumer credit score using the data supplied by CoreLogic. This information will be used to supplement the information that lenders already receive from traditional credit reports.
Much of the information being supplied in CoreLogic’s new credit file is already publicly available. The actual score is being designed specifically for the mortgage and home equity loan industry while the credit report is available to all types of lenders. With lenders becoming increasingly restrictive about who they will lend to, the new score is viewed as a way to help lenders manage risk by providing more information in an easy to use format.
The fear of many consumers is that the new credit file will reveal negative information that was previously hidden, which could do significant damage to their prospects for obtaining more credit. On the other hand, consumers with limited credit histories could be helped by the addition of previously unreported financial information to their credit report. It is estimated that 100 million American consumers will have the new credit report while more than 200 million people will have the traditional credit reports from the three major credit monitoring bureaus.