FICO Scores Too Traditional Says Digital Risk

Many consumers would feel that their FICO scores are not very accurate in showing their capabilities in handlinga mortgage loan. In fact, experts from the Digital Risk believe that one’s FICO score alone is not capable of showing just how capable a person is in his financials.

All those who have a FICO score of 690 or better then you know that you can get any loan you want. Sometimes it can be pretty unfair how lending institutions seem to be very reliant on the scores in approving loans.

According to Digital Risk FICO scores have been unsuccessful in predicting the right amount of mortgages for clients for years. Many customers and critics believe that the financial institutions must find another way to measure the capability of individuals to pay for mortgages. Credit histories could be both misjudging and unfair.

According to Peter Kassaboy, the chairman and chief executive of Digital Risk, the industry is only relying on methods that are no longer up to date and risky. FICO high scorers tend to depend on their high scores to get cheaper and better deals than those who had already fallen into the Bad Credit category.

In a study conducted in 2009, the findings reveal 588,000 homeowners having to leave their houses in 2008. This marks 18% of the total economic downfall that occurred in the financial industry during the depression. The creator of the FICO score, Fair Issac, defends that the tool allows the lenders to determine if an individual will be capable of paying through measuring their credit and history and one disadvantage of the system is the strategic defaults it imposes on those with different scores.

However, Digital Risk says that strategic default is not the only problem. The company has introduced a system which they call the “Veritas” it is capable of determining the credit characteristics of clients. This is a tool that measures the behavior of a borrower despite his credit FICO score. It will provide lenders with the idea of how a borrower will be acting when he takes on a loan.

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. Answers to FICO Score Query Answers to FICO Score Query Everyone with bad credit might be interested to know the issues discussed in the latest TweetChat between FICO and Bankrate com. It is important that consumers with bad credit understand how credit scores work. In Auto Credit Express, for the…...
  2. Bankruptcy Scores: Another Measure of Credit-worthiness Bankruptcy Scores: Another Measure of Credit-worthiness According to experts, another way for lenders and credit-card issuers to estimate the ability of applicants to pay their debts is through their bankruptcy score. Your bankruptcy score determines your possibility, as a potential borrower,…...
  3. Understanding Credit and Credit Scores Understanding Credit and Credit Scores Bad credit creates many difficulties to get a mortgage, credit card, student loan or car loan. When you have a bad credit record, it creates an impression on the mind of creditors that you are not paying…...
  4. Credit Scores Continue to Improve in The United States Credit Scores Continue to Improve in The United States The recession that hit the United States on 2008 has placed borrowers and lenders alike in a bad place. Credit scores suffered, and worse, it was difficult to get a loan when your…...
  5. Applicant Credit Scores Keep Canal Cove Homes Empty Applicant Credit Scores Keep Canal Cove Homes Empty Canal Cove currently feels like a ghost town as the lots in the neighborhood stay empty. According to the Myrtle Beach HousingOfficials of the estate, their search for qualified homeowners and occupants are…...

Filed under: CreditCredit Score

Like this post? Subscribe to my RSS feed and get loads more!