Back in the good old days, all you had to understand was your FICO score and you could rule the world. Granted, very few people had a handle on the FICO computation, but a growing number of people are getting a clue. Now, just to throw a monkey wrench into things, FICO is adding information from CoreLogic that could place even more hurdles between potential buyers and a new home.
What is The CoreScore?
CoreLogic has developed a CoreScore. This score includes some very non-traditional information that is public record. With this new score, failing to mow your lawn could prevent you from getting a mortgage. Well, not just skipping it one Saturday, but getting a ticket from the city for not mowing on a regular basis, but you get the idea. The issue only shows up if you are fined, then fail to pay the fine. Most cities will attach a lien or garnish your wages to collect. Either action will cause a red flag that could prevent you from getting a mortgage.
What about Inaccuracies?
While a garnishment or lien is a legitimate reason to deny a loan, is the CoreScore very accurate? The first issue with its accuracy has to do with the amount of public data. With such a high volume of data, there is an exponential chance for errors to occur. Public property information, for example, is not easily and accurately traced to individuals. Take property taxes for a specific example. It can take property tax collectors months, or years, to change the owner of record. There’s no hurry because the property can not be moved out of town and the taxes are levied on the property not the owner. That removes the need for a hurried record change. Add to that, the fact that most banks require an escrow account for property taxes. Your taxes may be going unpaid because your mortgage holder is not paying them on time. Is the bank going to take the credit hit? No, you will.
Right now, the CoreScore is a new product. It is not an industry standard, but is gaining popularity. It is hard to imagine the headaches it will create or the number of lawsuits. That doesn’t even take into account how many mortgages could be denied because of someone else’s mistakes or because a government worker was too lazy to change a public record.
Taylor Brown covers personal finance topics across the web. His company, CreditRepairZoom.com, helps consumers repair their credit. This is becoming an increasingly popular trend for people who want to secure a home or auto loan pre-approval, despite a tarnished credit history.