July 10, 2012
FICO and CoreLogic Announce Availability of More Predictive Mortgage Credit Score Designed to Enable Growth in Mortgage Lending Market
Innovative predictive score can help lenders safely grow mortgage origination volumes
SANTA ANA, Calif.; July 10, 2012 - CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, and FICO (NYSE: FICO), the leading provider of predictive analytics and decision management technology, today jointly introduced a high-performance consumer credit risk score that is expected to improve lending decision quality and increase the number of mortgage loans lenders make. 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, introduced in October 2011, 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.
According to a recent FICO quarterly survey of bank risk professionals, conducted by the Professional Risk Managers’ International Association (PRMIA), bankers continue to lack confidence in the housing finance marketplace. Of bankers surveyed, approximately 75 percent of respondents expect the level of mortgage delinquencies to increase or stay the same over the six-month period following the survey, and more than 85 percent hold the same view for home equity line delinquencies.
“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,” said 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. As such, it not only provides a more complete and predictive evaluation of a consumer’s credit risk profile, but it can empower lenders to better mitigate risk and approve more loans for more consumers.”
“The new FICO Mortgage Score is designed especially for prequalification and origination and delivers increased insight when it matters most,” said 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.”
The new FICO® Mortgage Score Powered by CoreLogic® maintains a consistent score range, set of reason codes and odds-to-score relationship with prior FICO® Score versions, making it easy for lenders to integrate and for consumers to understand. Additionally, the CoreScore Solution maintains backward compatibility making it readily available within existing CoreLogic Credco Instant Merge® integrations – the most widely used credit report in the mortgage industry.
For more information about the new FICO® Mortgage Score Powered by CoreLogic® and the CoreScore credit report, visit www.CoreScore.com.
With over 10 billion FICO® Scores used worldwide to empower lenders to make credit decisions, the FICO® Score has become the standard measure of credit risk worldwide. FICO® Scores are used today in more than 20 countries on five continents, as well as all of the top 50 U.S. financial institutions and both the 25 largest U.S. credit card issuers and auto lenders. The latest FICO® Score version, the FICO® 8 Score, has already been adopted by more than 7,500 lenders.
FICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com. Learn more at www.fico.com. FICO: Make every decision count™.
For FICO news and media resources, visit www.fico.com/news.
View All Press Releases