Attention Home Buyers: Mortgage Lenders Have A New Credit Scoring Tool

FICO, the leading provider of analytics and decision management technology, and Equifax, a global leader in information solutions, today introduced BEACON® Mortgage Score, a new FICO® industry score specifically designed to help mortgage lenders make the best possible risk decisions when addressing both current homeowners and those aspiring to own. Equifax plans to make the new score available in April to mortgage lenders and servicers for use in their loan servicing decisions including mortgage loan modifications. (Click here to read a copy of FICO's news release)

Andres Navaro, a writer for MortgageRatesinCanada.ca, discusses in his article titled "Buyers Beware: New Beacon Scores Tool Launched for Mortgage Lenders" what this new scoring tool could mean from the borrower's perspective. Navaro states,

"The new BEACON® Mortgage Score tool will have some features of previous BEACON score products, including maintaining the current scoring table, which goes from 300 – 850. It will also maintain the current policy on how inquiries affect your credit score. What’s new is that now, in addition to the already existing reason codes used to explain information of your report, there will be an additional 15 more codes. However, the biggest potential challenge for those of you trying to qualify for, refinance, or modify a mortgage loan is the fact that even more data will be used to scrutinize your mortgage loan credit worthiness; unfortunately, what type of "additional data" is used has not
been released but it has been said that the information is based on information that Equifax collects on credit holders. (This is a prime reason to make you’re your credit information on file at Equifax is correct!)"