All three major U.S. credit reporting agencies are now offering a new FICO score from Fair Isaac Corp. that’s specifically designed for prescreening, originating and servicing mortgages, the company said.
The new score helps the lender identify at-risk borrowers earlier, mitigating the incidence and high cost of early payment default and foreclosure.
The FICO 8 Mortgage Score does a better job identifying accounts that are overdue by 90 days or more, pushing more high-risk borrowers into lower score ranges, the company says in promotional materials.
The FICO 8 Mortgage Score uses the same 300-850 scoring range as the all-industry FICO score most widely used, but is better at predicting whether a borrower will default on a mortgage, the company says.
The score can be used not only by mortgage originators to assist in underwriting decisions, but by loan servicers to spot borrowers who may be at risk of foreclosure.