Developed in partnership with FICO, the leading provider of analytics and decision management technology, the FICO Mortgage Score Powered by CoreLogic takes all of the data available in the merged CreditIQ report - the traditional data from the national repositories and the unique supplemental consumer credit data from CoreLogic – and generates the industry's first "composite” credit score for mortgage origination risk. This scoring model is designed to help determine whether or not a loan will go 90+ days past due within 24 months of scoring.
Analysis of the score shows that it is 7.5% more predictive than other generally available risk scores commonly used by lenders today. This lift can potentially translate into millions of dollars in additional revenue by helping lenders reduce the number of bad loan applications they accept, and increasing the number of good loans approved. The score has been developed using FICO's traditional score range ( 300-850®), calibration and reason codes, making it easy to integrate into your existing processes.
Discover New Lending Opportunities
Analysis conducted using a representative sample of loan applications demonstrates that the use of CreditIQ can increase the number of loans accepted and new revenue generated. For example, a lender specializing in conforming loans ($417K or less) and using a cutoff score of 700 on an industry-standard FICO risk score could incorporate the score into their existing underwriting strategy and increase its acceptance rate by over 1% with a slight reduction in the overall bad rate.
Assuming the revenue from a good loan equals $2,000 and the loss from a bad loan is $50,000*, the new score would generate a net financial benefit of $38.59 per application. On a pool of 300,000 applications, this equates to an incremental impact of approximately $11.6 million, attributed to safely approving more than 3,100 new applications and mitigating potential credit losses of $5.5 million.
*Loss metric is from the Mortgage Bankers Association Lender’s Cost of Foreclosure Policy Paper and represents the cost of taking a property to foreclosure excluding the gain/loss on disposition. Loan profit figures are an assumption based on average figures provided by multiple lenders and additional sources. Results may vary based on location, population, loan pool and other external factors.