Ilyce Glink’s column in the Sunday, Homes section of yesterday’s Oregonian, talked about recent changes in FICO credit scoring. More specifically, FICO has used their predictive analytics to focus on a mortgage FICO score. So they looked at, when the going gets rough, how will borrowers behave in relation to their mortgage payment. Will they make that payment come heck or high water? Or is the mortgage the first payment to go. This score is called FICO 8 mortgage.
FICO also updated their more standard credit scoring, now FICO 8, being the eighth revision of the credit scoring model. This version isolates how borrowers pay against tough economic conditions. Do consumers (or a specific consumer) pay late on a few specific debts, or late across the board?
The article also touched on a few interesting points. The first is that the average credit score, through these tough economic times, remians the same, at 712. What has happened is that folks with good credit have become more conservative, driving their credit scores up, while those with financial difficulties have seen lower scores. This may be an indicator of the broadening gap between wealthy and poor we are seeing today in America. Also of interest,in isolating the FICO Mortgage 8 score, FICO found the vast majority of Americans pay their mortgages. We’re just hearing much more about the 10% who don’t.
Read the full article here