I live and work in Seattle and face the new challenges of being in the mortgage industry. It is a relief to know that there may be a simplified process of scoring which will help all borrowers with better and more accurate scoring regarding their personal credit.
It looks as though there looms on the horizon a new and better credit scoring mechanism, that is being considered by the 3 major credit bureaus – Transunion, Equifax, and Experian. Currently the mechanism’s that make up the scoring that is used today is extremely complex and seems to place to much emphasis on the small things that affect credit adversely.
Some of the positive attributes of the new system being considered will be:
– The new system takes into account more of the borrowers history and will penalize individuals less for single unusual events.
– There are additional scoring card levels which will allow for finer adjustments of an individuals credit score.
– The new system will reduce the power of credit collectors, because of single events that are accidentally reported in error which will result in a less impact on your score.
– With a more accurate means of scoring, the result should mean that there will be less foreclosures.
The major downside to this new scoring system is that it has not been currently adopted by the government agencies of Freddie Mac and Fannie Mae. It is however being considered by them and will most likely be approved in the near future. The ultimate attribute to this is that it can be a huge boost to the current housing market, because it will give lenders a truer insight as to a respective borrowers credit worthiness in buying or refinancing a home.