Credit Articles

FICO 9 – Credit Scoring Formula Updated For 2014 — New Credit Scoring Model from FICO April 2014
In total, there are over fifty different versions of the credit scoring model that can be used to calculate consumer scores, each calculating the same data in a slightly different way. And in that tradition, FICO’s latest version, “FICO 9,” is set to be rolled out this summer.
Reg V – Risk Based Pricing Credit Disclosure Rules (Effective August 15, 2011) Dodd-Frank Fair Access to Credit Scores Act. [Download Charts/Checklists - Risk Based Pricing Forms H-5, H-6 & H-7]August 2011
More changes from Dodd-Frank expand on helping the consumer understand how their credit score is used to approve or deny their loan. The Risk Based Pricing Changes expands on what lenders are required to explain to the consumer about how their credit score is used to determine which interest rate pricing they will fall in, and how you must disclosure this information. New forms and usually used in conjunction with Reg B forms.
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New Changes to Credit Denial/Adverse Action Statements (Effective 8-15-11) [Download Charts/Checklists: 5 Credit Decision Forms (C-1 thru C-5)] — New Credit DenialTermination Forms August 2011
Revisions to Reg B were made to help the consumer more clearly understand why they are being denied the loan. You need to have made these changes by now to your loan origination software (LOS) and forms to comply with Dodd-Frank. The additional guidance provided by the FRB must be implemented by August 15, 2011. (FRB & FTC (Dodd-Frank) Reg. B Equal Credit Opportunity )
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Update on the New Credit Score Disclosures (Effective July 21, 2011) [Download Charts/Checklist - Sample Credit Disclosure Form] — Credit Disclosure Form June 2011
Take a look at this new disclosure that will be part of the mortgage credit report you pull. Know how to explain it. This information is a great place to show your clients where their score is for each bureau as compared to everyone else. This tool should help your client understand why they are paying more for the “risk” the lender is taking because of their scores.
FICO Strategic Default Credit Model - How it affects Your Borrowers — Strategic Default Credit Model May 2011
FICO (Fair Isaac Company) has developed a new “profile” model that detects the characteristics of “strategic default” consumers. So here we have the great oxymoron, the very customers that pay all their bills on time and the ones we assume are least likely to default… are now being targeted!
Reason Codes on a Credit Report, What do They Really Mean? [Download Mortgage Talking Points™ flyer, Credit Scoring - Top 20 Reason Codes and How They Affect the FICO Score] — Mortgage Talking Points flyer April 2011
There are 20 reason codes that can show up on a credit report. Keep in mind when you are reviewing credit reports that 65% of the score is controlled by 2 categories that make up a score. So if the consumer is looking for a few extra points the reason codes can lead you to areas where you may find inaccurate or unverifiable information that could be affecting their scores.
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IRS Announces Rules for Struggling Taxpayers - Major Changes Made to Lien Process — IRS New Program March 2011
Here’s some “relief” for clients with tax liens. As a loan originator, if you’ve ever had to deal with Tax Liens or the IRS (in helping your clients), it’s usually not much fun. If a tax lien hits a credit report, it can be an immediate 100-200 point hit. This can be devastating for anyone recovering from a job loss, shut down a business or trying to get a new job. So here is some good news.
Credit Score Disclosures - Dodd-Frank Fair Access to Credit Scores Act (FACS) [Effective July 21, 2011] and Fair Credit Reporting Act 2010 — Consumer Credit February 2011
Be prepared to add another disclosure to your already huge stack. Under the risk based pricing rule, lenders are required to send a notice to any client receiving a loan with less than the best rates possible. The new rules will affect all lenders who take “adverse action” against a consumer because of the information and scores on their credit reports. (Dodd-Frank Fair Access to Credit Scores Act (FACS), Fair Credit Reporting Act 2010)
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Federal Reserve Released “The Consumer’s Guide to Credit Reports & Credit Scores” — Credit Report Guide December 2010
This new guide has a lot of good stuff for consumers. Demonstrate you are the “expert” and use MY valued added comments that explain what the report “does NOT tell them”. Email your past clients, prospects and real estate agents. Give a copy of this to your “credit-challenged” clients! Oh, and it’s an awesome give-a-way at your home buying seminars. (Federal Reserve Consumer Guide 11-10-10)
Vantage Scores and NMLS - What You Need to KnowDecember 2010
If you’ve checked your own credit using a FICO score to determine what NMLS will be looking at—just throw it away! They are using Vantage Scores!