Sometimes it's hard to escape the notion that our lives are being slowly, inevitably reduced to a single database.
For instance, if you thought your current credit report told the full story of your financial persona, it's nothing compared to what's on tap from CoreLogic, a Santa Ana, Calif., firm that has announced a credit-reporting service it hopes will provide lenders even deeper insights into your habits.
The company introduced its CoreScore Credit Report on Monday in Chicago at the annual meeting of the Mortgage Bankers Association, and will have it fully operational in two initial phases to roll out in November and March. Its aim, according to CoreLogic senior vice president Tim Grace, is not to be a fourth big-firm credit report in addition to TransUnion, Experian and Equifax but to be a supplement to their existing reports.
CoreScore is a glimpse into such concerns as how we measure up as renters; a fuller picture of the real estate we own, even if we don't have mortgages; how we've managed our relationships with online lenders, and much more that currently may fall into the cracks of traditional credit reporting, according to Grace.
He explained what kinds of information about us soon will be much more readily available to lenders:
Q: What is a CoreScore, and why does your company think it's needed?
A: CoreScore will contain information that lenders typically don't see on a traditional credit report, information that consumers also don't have at their fingertips when they call for a credit report. We're also going to have payday lending information, data on online or Internet loans, rent-to-own applications and payment histories.
All of this data does exist, though on a somewhat piecemeal basis; we're putting it into one report, in one place. CoreScore is needed because lenders want to have closer to a 360-degree view of a borrower's credit capacity and behavior when making lending decisions. It can uncover additional debt obligations. But it also can increase new lending opportunities by identifying previously hidden credit behavior that could improve a consumer's credit profile.
Q: What kind of hidden credit behavior?
A: Well, renters, for one. Much of our report will have data available on Nov. 30, but in March, we will also have data available that will be one of the largest credit-information sources for landlords and tenants. We will have all the tenant applications that have been submitted through our SafeRent, subsidiary. We also will collect eviction notices from courthouses. We enable a creditor to know whether a consumer has had rental problems.
On the flip side, we'll be able to provide for many, many consumers a record of their reliability as renters. I think this actually could be a positive for consumers, because they'll be able to show they've been on time with rent, haven't been evicted, and have a history of good payments. Our data collection on renters initially began with the major landlords across the country, but our database now can go all the way down to the smallest landlords.
Q: What other kinds of credit information are you consolidating into this report?
A: In the November launch, we'll have full reporting on property ownership — not just properties on which a credit applicant has a mortgage. We also will have judgments of child support and deficiencies, property liens such as homeowners association liens, and federal or tax or city or county liens against property. We're also going to provide the tax information on a property and bankruptcy filings. You might think that a credit report would (automatically) have a bankruptcy record, but we believe we have the only bankruptcy record for consumers 48 percent of the time. And we have the only tax lien record for consumers 45 percent of the time.
Q: How is this aggregation of the data likely to affect the lending process?
A: It's going to get it into the hands of the lenders faster. It's just extremely difficult to collect 100 percent of the information, because it's scattered through courthouse records and through county recordings.
We're offering this information to lenders because we believe that aggregating it in this way will get it into their hands much more quickly than in the current system.
Take property ownership, for example. In the current system, it could be 60 to 90 days before a credit bureau has the information on a new mortgage. But we aim to have it to them within 23 days. In the current lapse of time, a consumer may have opened the mortgage and then applied for credit cards or even other mortgages.
Q: What's in this for the consumer? Aren't there some Big Brother overtones here?
A: This data is all out there and collectible, it's just hard for lenders to gather it under the current system. We're aggregating it.
It's important to remember that we're delivering this information to lenders in a way that's fully compliant with the Fair Credit Reporting Act. Somebody can sell data to lenders all day long and not be compliant (with that law). By "compliant," that means that by law, consumers can call for their credit report once a year, for free.
This means that if the lender uses information from our CoreScore Report to take an adverse action — that is, turn you down for credit — we will be listed as the source of information. A consumer who believes that such a decision has been based on inaccurate information can call in to our dispute center and challenge the source, and we will investigate. If they're right, we will delete (the incorrect information).
Q: So, what's next? What's likely to show up in credit reports that's going underreported now?
A: We'll be collecting mobile-phone (payment) information and utility information. That can go two ways for consumers. If the consumer is responsible and creditworthy, it could benefit them because we'll have more information — particularly helpful in the case of someone who doesn't have a traditional credit card or a traditional mortgage they've been paying on. This could give information that they're good, creditworthy consumers.Copyright © 2015, The Baltimore Sun