The last 8 years have been a serious upset to the economy and housing market.  With all the changes we’ve seen in mortgage and finance, housing values, approval processes and mortgage programs there are still other changes to be made.

Many of those adjustments are put into place for the sake of professionals like a Michigan mortgage lender, ultimately making it easier to get inventory moving and get buyers back into the game.  The people behind the FICO credit score are now working with CoreLogic to help out with improvements to the system as well through their new FICO mortgage credit score.

FICO recently announced that they will be releasing a new score that includes more non-traditional information and data.  Previously, your FICO score (checked when applying for a mortgage through a Michigan mortgage lender) dealt with things like car payments, credit lines, loans, medical bill reporting, and general collection accounts.  The new score will include data such as rental history, short-term loan data and more.

Including additional criteria and data is beneficial to first-time home buyers in Michigan who would have difficulty getting approved with a Michigan mortgage lender due to a lack of credit history.

Nontraditional data “could help that consumer who has positive alternative credit get the credit they deserve,” says FICO’s Joanne Gaskin. For example, a consumer who doesn’t have any credit cards, but has repaid a payday loan on time could benefit by the extra information in the report.

A consumer who has a mortgage with a credit union that does not report to the credit bureaus would also benefit from the new report, says Jason Schneider, a spokesman for CoreLogic. In addition, “short-term installment loans may help a borrower show good behavior that would not be visible on his traditional credit report,” he says.

Young borrowers may also get a boost, says GreenPath Debt Solution’s Munzenburger. “If somebody had a thin file, somebody younger, maybe 18 to 22, just getting their first credit card, there’s not much for the lender to go on,” he says. However, nontraditional information could make an important difference. “That could definitely help, no doubt about it,” he adds.

The report includes information that other credit reporting agencies, such as Experian, TransUnion and Equifax, don’t factor into your traditional reports. If you were late on child support payments, applied for a payday loan or had trouble paying your rent on time, it could show up on your CoreScore Credit Report and be factored into your new FICO mortgage score. But on-time payments on a second mortgage will also be factored into your score, as well as all those months you paid your rent like clockwork. It’s not intended as a replacement for traditional FICO scores, but as another tool for mortgage lenders to use early on, at the prequalifying stage for borrowers. “It’s simply bringing in additional data,” says Joanne Gaskin, a director of product development at FICO.

“The level of detail is unbelievable,” says Mark Munzenburger, director of education at the credit counseling agency GreenPath Debt Solutions. Consumers will be surprised by just how much information about them is out there, he says. “Consumers really need to be aware that, more than ever, everything they do with respect to their finances is somehow tracked and kept in a database.”

According to Tim Grace, senior vice president of CoreLogic, over 70% of consumers in a study sample of 300,000 mortgage applicants scored higher with the FICO mortgage score powered by CoreLogic than with typical credit scores. “24% saw their scores increase by more than 50 points,” he said. “For borrowers in the 580-619 range, those who are close to a lender’s typical credit score minimum, 45% of that population saw their scores improve enough to meet the credit score threshold,” added CoreLogic spokesman Jason Schneider.

This new scoring model is currently being tested and there is no current announcement an when it would be rolled out and put into effect.