The “New” Credit Score: CoreScore

Submitted by Jen Jones on Sun, 12/18/2011 - 10:37am

The “New” Credit Score: CoreScore

Think your old credit score was bad?

Well, now there’s a new kind of credit score taking center stage…and setting the stage for financial institutions to make even more money off of the poorest Americans.

According to The Huffington Post, “The new CoreScore looks at financial records such as credit card borrowing, bank transactions and mortgage information, much like a traditional FICO credit score. The new rating also examines the kinds of transactions likely to occur at the lower end of the income scale. These include car and rental payments and payday loans. The CoreScore even examines the record for missed child support payments. If something can be financed, it seems, it can be linked to this new credit score.”

This could be bad news for those hardest hit by the current economic climate as the use of a wider range of nontraditional financial information in the CoreScore may prompt banks and other lenders to charge even higher rates for down-and-out borrowers. And in the end, these same lenders could care less about charging more for even inaccurate or out-of-date information on loans for everything from mortgage bills to car loans.

“CoreScore supplements traditional credit reports from the three major credit reporting companies, the company said. Lenders of all stripes, including for mortgages, cars and credit cards can buy the new reports, which are scheduled to debut publicly in March. Currently one mortgage lender, which CoreLogic would not name, is using the CoreScore for its credit evaluations and several top lenders, including major banks, are planning to test the score soon,” reported HuffPost. “At least 100 million Americans will have a new CoreScore report, says CoreLogic, and that includes both people who have traditional credit scores, as well as those who have no prior credit history with TransUnion, Equifax or Experian. At least 200 million people have traditional reports, used to create a FICO score that lenders consult when deciding to approve a loan application or new financial account. Employers even use credit scores to evaluate job applicants.”

CoreScore’s broad-based criteria may also impact non-traditional borrowers. For Americans who essentially “live off the credit grid,” either using cash or borrowing through informal channels, the new CoreScore could be a tough sell as well. Those folks getting a “new score” are likely to have a lower score under this nontraditional reporting scheme, giving them even less economic room to begin their history, even if they’ve been “good consumers” under traditional debt standards.

As HuffPost reported, “Falling wages, a dismal housing market and high unemployment have sent more Americans to the margins of borrowing in recent years. The problems is especially acute in American suburbs, where poverty is spreading. Meanwhile, alternative consumer financial tools have seen tremendous growth. For example, online payday lenders -- high-interest short-term loans accessible only through the Internet -- experienced 35 percent growth in revenue in 2010, according to a market report from Core Innovation Capital and Center for Financial Services Innovation, a think tank focused on financial service innovation for consumers who use banks minimally or not at all.”

If you’re seeking your credit report because you’re facing insurmountable debt and have been consistently rejected from loan offers or have fallen victim to identity theft, it might be a good idea to consider getting a fresh start through bankruptcy. Contact the Law Offices of John T. Orcutt in North Carolina TODAY for a totally FREE debt consultation. Just call toll free to +1-919-646-2654, or make your appointment online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button. Now offering Saturday appointments!

Debts Hurt! Got debt? Need help? Get started below!

Serving North Carolina

  • Charlotte
  • Fayetteville
  • Durham
  • Wilson
  • Greensboro
  • South Raleigh (Garner)
  • Southport (Phone Consults)
  • Wilmington (Phone Consults)

North Raleigh

6616 Six Forks Rd Suite 203 Raleigh, NC 27615 North Carolina

Tel: (919) 847-9750

North Raleigh

Charlotte

7400 Carmel Executive Park Dr Suite 105 Charlotte, NC 28226 North Carolina

Tel: (704) 318-2702

Charlotte

Fayetteville

2711 Breezewood Ave. Fayetteville, NC 28303 North Carolina

Tel: (910) 323-2972

Fayetteville

Durham

1738 Hillandale Road Suite D Durham, NC 27705 North Carolina

Tel: (919) 286-1695

Durham

Wilson

2215 Nash St. NW Wilson, NC 27896 North Carolina

Tel: (252) 234-9194

Wilson

Greensboro

600 Green Valley Road Suite 210 Greensboro, NC 27408 North Carolina

Tel: (336) 542-5993

Greensboro

South Raleigh (Garner)

143 Highway 70 Garner, NC 27529 North Carolina

Tel: (919) 747-4400

South Raleigh (Garner)

Southport (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 218-8682

Southport (Phone Consults)

Wilmington (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 447-2987

Wilmington (Phone Consults)