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CoreLogic’s Credit Reporting Tool Outperforms Traditional FICO

As many continue to complain credit remains tight across the industry, ""CoreLogic"":http://www.corelogic.com/default.aspx seeks to improve the analytics that help drive underwriting standards in order to help lenders make better lending decisions.


According to ""CEB TowerGroup,"":http://www.executiveboard.com/exbd/financial-services/tower-group/index.page CoreLogic has accomplished its goal. The independent research firm found CoreLogic's FICO Mortgage Score with CoreScore Solution is more effective at identifying risky loans than the traditional FICO Score used by many loan originators.

Among the riskiest 10 percent of the population, CoreScore is able to identify 10 percent more bad loans sooner, according to CEB TowerGroup's analysis.


A lender who processes 300,000 applications per year could see 3,900 more loans approved and incur an additional $14.5 million, according to Tim Grace, SVP of product management at CoreLogic.

As many lenders today seek new data sources to help them better assess credit risk, ""[t]he challenge facing lenders today is determining what supplemental credit data is relevant and predictive of future consumer behavior,"" said Craig Focardi, senior research director at CEB TowerGroup.

CEB TowerGroup found both traditional FICO scores and the CoreScore Solution are effective at ranking mortgage credit risk, but they did find CoreScore was more effective at identifying the riskiest loans.

CoreLogic itself conducted a ""survey"":http://www.corelogic.com/landing-pages/corescore-for-lenders.aspx and found 29 percent of all credit reports it reviewed were missing information, and 19 percent had undisclosed mortgage debt.

CEB TowerGroup's recent white paper, _Enhanced Credit Data and Scoring: Deeper Insight into Mortgage Applicants,_ ""shows that lenders can improve their identification of credit risk by double digits, allowing them both to approve good loan applications that might otherwise be declined and further verify or decline risky applications that might otherwise be approved,"" Grace stated.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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