New Credit Scoring Promises to Qualify More Columbia SC Homebuyers

More Columbia SC homebuyers should be able to qualify for a mortgage without the increasing risk to lenders that caused the big credit crunch. All of this should come about through more sophisticated credit risk scoring that uses alternative data, such as unsecured credit and property history in consumer credit report analysis.

Traditional credit data and analytics continue to be relevant, but are not sufficient to satisfy the consumer credit reformation of today. As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders and investors.

Consumers used to pay mortgage debts first, but because of the recent financial crisis some consumers now treat paying other debts, such as credit card bills and car payments, as a higher priority to maintain personal financial liquidity.

Why More Columbia SC Homebuyers May Qualify

According to a new report by the CEB TowerGroup, data from a joint analysis conducted by CoreLogic and FICO that compares the FICO® Score used by most lenders today with a new score launched in July was evaluated. The traditional credit data from national credit data repositories and the unique alternative credit data contained in the recently launched CoreScoreTM credit report shows the analysis of 300,000 mortgage applications found that 3,100 more applicants would receive a qualifying credit score of 700 and approximately 70 percent of a sample population saw their credit score improve.

The new FICO/Corelogic score is more accurate than the prior FICO® Score in identifying the riskiest loans improving lenders ability to discern consumer credit risk at origination. For applicants identified as the riskiest 10 percent of the lending population (those most likely to become past due on their mortgage loan), it identified 10 percent more seriously delinquent mortgage loans – loans 90 days or more past due.

This new credit risk scoring should help more Columbia SC homebuyers qualify for a mortgage than with the old scoring system. Alternative credit information can support Columbia SC homebuyers with newly established credit files with good credit, those with minimal information in their traditional credit files but with good alternative credit payment histories, and long-time renters with no serious payment issues.