Marc Guzman's West County Blog
November 30, 2011…
This is the day that is being claimed to change consumer credit reports. CoreLogic, a leading provider of financial, property and consumer information, is releasing its latest product “CoreScore.” The CoreScore report will not replace current credit reports, but instead will be a supplemental report to a credit report. It’s sole purpose will be to expand the view of borrower credit profiles and deliver important insight into risk not typically seen on a standard credit report.
Items that will be included in the CoreScore report include:
- Properties owned - with or without debt obligations (including current and previous properties owned)
- Mortgage obligations with companies that do not normally report to the credit bureaus
- Legal filings on properties; such as Notice of Defaults
- Property tax amounts and payment status
- Estimated market value on real estate owned
- Rental applications and legal evictions
- Inquiries and charge-offs from online or pay-day lenders
- Bankruptcy, Liens, Child Support, Judgments and other obligations
- And much more…
According to CoreLogic’s testing and sampling of credit reports it was found that 1 in 13 reports were missing consumer credit data, such as mortgage obligations to third parties, that could significantly affect a borrower’s debt-to-income ratio, credit score and qualifications.
So is this a good thing or bad thing? Well you can argue from both sides and make valid points. You could claim this is bad for consumers because financial institutions could make qualification requirements stricter. Stricter requirements could apply to mortgage lending, credit cards, small business loans, auto loans, etc. Obviously this is not what the economy needs during the current tough economic times.
You could also argue that this is a good thing. Despite all the new regulations and stricter qualification requirements, there is still fraud and bad loans being made. Many times bad loans are made because what is visible on a credit report looks great but much more is hidden that is not brought out to the open. For example, the hidden lien on the borrower’s business entity. Or how about the real estate property that appears to be owned free-and-clear but has a mortgage obligation to a private third-party lender and the property is actually under-water?
I guess we will just have to wait and see how this new CoreScore Report will change consumer borrowing.
