Credit Scores, Score Disclosure Solutions

Credit ScoreMany types of decisions are made based on credit scores, including terms for loans, credit cards, auto financing, credit lines, leases, insurance policies and other financing transactions.

Credit scores produced from models developed by Fair Isaac Corporation are commonly known as FICO® scores. FICO is the most popular scoring model used among lenders and creditors to calculate credit risk. This mathematical equation evaluates many types of information from a credit report compiled by a credit bureau. By comparing this information to the patterns found in thousands of past credit reports, scoring estimates the level of risk a lender or creditor is assuming.

There are 3 national credit bureaus – Experian, Equifax & TransUnion. Each of the national credit bureaus utilizes the FICO algorithm to provide credit scores. Fair Isaac Corporation continually upgrades its scoring models to provide the most accurate credit evaluation possible.

There are many different scoring models available for different industries and decision-types. For mortgage credit reports, there is a mortgage FICO score that provides insight into a borrower’s ability to repay.

The score is based on the credit data available in the consumer’s file, resulting in variations from bureau to bureau. A consumer's credit score also varies depending on the score model requested. Scores usually fall between 300 and 850 – the higher the score, the lower the potential risk posed by the consumer. Many factors come into play when determining the credit score, including:
  • past payment history
  • amount of debt
  • length of time credit has been established
  • search for and acquisition of new credit
  • types of credit established
Not all consumers have a credit score available. This is usually due to too little credit data in their file.

Score Disclosure Solutions 

The Fair and Accurate Credit Transactions Act (FACTA) requires mortgage brokers and lenders to provide a disclosure to any home loan applicant on which they have viewed a credit score. The disclosure must include:
  • credit score
  • key factors effecting the score
  • score range
  • date the score was created
  • name of the bureau that created the score
CIS helps you comply with FACTA by handling delivery of the disclosure for you. CIS mails the required disclosure directly to the applicant, within the required time frame, when you request Score Disclosure service.

Contact a CIS Specialist to add this convenient service and for more information on Credit Scores.

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