Credit Care

(An excerpt from

New year, new credit? Not quite. Many things reset every year on January 1, but your credit score is not one of them. And this year a new credit report will dig much deeper into a consumer’s history than traditional credit reports. CoreLogic is working together with credit score provider FICO to create a new scoring system based on a broader collection of data. The actual score will be ready in March and is being created for mortgage and home equity lenders; major lenders are interested in utilizing the information, which means it could eventually be built for other types of credit. Here are a few things you should know about the new system.

Why are they doing this? According to CoreLogic, the aim is to provide lenders with more details about prospective borrowers, enhancing what they already know from the more traditional credit reports.

What will be revealed? Apply for a payday loan? Have a property tax liens? Miss a rent payment? Fall behind on HOA dues? The new credit file will capture all of this financial activity and more; it maintains a collection of consumer data on almost everything that most of the traditional credit bureaus do not.

What does this mean? As a result of the additional data included, the new report may shed negative light on previously “clean” records. For instance, it may show that you owe more than your house is worth or if you fully own any other real estate properties. It is also supposed to catch smaller lender mortgages that the big credit bureaus may have missed.

Is this good or bad? Although it is scary to think that companies may now have even more of your personal information, the added information could help some consumers with skimpy credit files by highlighting positive behaviors, like making rent payments on time.

Make sure you are aware of your credit score and understand your credit report, both can have a significant impact on your finances and financial future.

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