CIC Credit & NCRA comments on FICO version 9.0

18. August 2014
FOR IMMEDIATE RELEASE
CIC Credit & NCRA comments on FICO version 9.0
FICO® 9.0  Great New Features, but Currently Not Available for Mortgage Lending

CIC Credit has received numerous emails and phone calls about the recent news headlines of the FICO 9.0 and the impact it will have on consumer lending. Now for those CIC Clients that pull credit for consumer mortgage lending, the impact will have to wait for the GSE's (Fannie, Freddie, ETC.) to accept the new score models along with the major lenders. All other CIC Clients if you would like to switch to the new FICO 9.0 we will do an additional release once we have the product ready and you will be able to switch to the new score at that time. CIC has not been giving any pricing for the new FICO so at this time we do not know if this will affect any pricing tiers.

Last week credit score giant FICO® released the news about its latest credit score model. While the media noted all of the improvements associated with the expected changes the new credit score model FICO®9.0 will bring to consumers with respect to medical collection accounts, it is important to note that this will take time for consumers to experience its impact. As noted in numerous articles, it takes time for lenders to incorporate new score models into their underwriting. Despite this, both loan originator and consumer comments over the past week have shown a belief that the changes will be immediate.

With regard to the mortgage market, the changes will likely take even longer to implement. The mortgage lending market changes only as quickly as Fannie Mae/Freddie Mac and HUD allow underwriting changes, and that has historically been very slow. Since these agencies dictate which credit score models are accepted, it could realistically be years before they are implemented. The current score models required by Fannie/Freddie/HUD are: Equifax Beacon® 5.0; Experian®/Fair Isaac Risk Model V2SM; and TransUnion FICO® Risk Score, Classic 04.

Each of these score models have been replaced by two to three generations of credit scores by both FICO® and the credit score model owned by the three national credit bureaus, VantageScore. The current models required for mortgage lending are based on consumer spending habits from the 2004 - 2005 pre- financial crisis era, which has very distinct differences from the post-financial crisis consumer spending patterns of today.

NCRA believes that the changes in FICO® 9.0 represent significant improvements and recommends they be implemented as soon as possible. As a supporter of the Medical Debt Responsibility Act since its initial drafting in the 110th Congressional Session six years ago, NCRA welcomes the improvements FICO® 9.0 has made regarding medical collections. Another longtime NCRA issue, allowing rental payments to be factored into credit decisions, will also be addressed in FICO® 9.0. Both changes make the latest FICO® score similar to the VantageScore treatment of collections and rental payments, so this is not a radical change and needs to be embraced as soon as possible by all sectors of the lending community. As soon as these changes are approved for underwriting your NCRA member consumer reporting agency will be able to provide access to them.


For more information see:
FICO Press Release: FICO Score 9 Introduces Refined Analysis of Medical Collections

Fannie Mae's Single Family Selling Guide 9/24/2013 pages 459-460
https://www.fanniemae.com/content/guide/sel092413.pdf  

Freddie Mac's Single-Family Seller/Servicer Guide, Vol. 1; Chapter 37, 9/24/2013
http://www.freddiemac.com/sell/guide/ 

National Consumer Reporting Association
701 E. Irving Park Road - Suite 306 - Roselle - IL - 60172 Tel: (630) 539-1525 -- Fax: (630) 539-1526
www.ncrainc.org 

New announcement: DO/DU v9.1 August Update Release Notes

21. June 2014

Dear Clients,

 

Over the weekend of August 16, Fannie Mae will be releasing some changes in its system to allow end users to exclude credit report tradelines during DO/DU review if the tradeline contains one of the following:

1.   Inaccurate foreclosure information

2.   Foreclosure due to extenuating circumstances

 

The procedure for excluding such tradelines will be similar to the current process for tradelines identified as deed-in-lieu of foreclosure and preforeclosure sale.

The full details can be found on pages 1-2 in the following release notes:

 

https://www.fanniemae.com/content/release_notes/du-do-release-notes-08162014.pdf

OpenSSL Heartbleed Vulnerability not applicable to CIC

14. May 2014

OpenSSL Heartbleed Vulnerability not applicable to CIC

Recently in the news, a new vulnerability called Heartbleed was discovered with OpenSSL (https://www.us-cert.gov/ncas/alerts/TA14-098A). Please be advised that the vulnerability is not applicable to CIC systems. We use Microsoft for our server environment and IT has confirmed that we are not vulnerable:
http://blogs.technet.com/b/erezs_iis_blog/archive/2014/04/09/information-about-heartbleed-and-iis.aspx

How to respond to credit fraud

8. January 2014

The Four-Step Process

Experian® suggests that you follow a four-step process if you notice something unfamiliar or suspicious on one of your accounts or if someone accesses your bank account or commits any type of fraudulent activity using your identity.

Step 1: Contact Experian’s National Consumer Assistance Center

To add an alert at any time of the day or night, visit our online Credit Fraud Center or call Experian’s automated service at 1 888 397 3742.

  • An initial security alert can be immediately added to your credit file. This alerts creditors to confirm your identity before extending credit. Once an alert is added, your name will be removed from prescreened credit solicitation lists.

Remember! An alert may prevent you from being approved for new credit or you may be asked to provide identity information!

  • You also may request a complimentary credit report.
  • The alert will be shared with the other national credit reporting companies, Equifax and TransUnion, so they can add the alert to their credit files.

Step 2: Review Complimentary Credit Report or Order Report

  • Review your consumer disclosure for fraudulent data and call the special telephone number listed on the credit report.
  • You will speak with an Experian consumer assistance associate who is specially trained in fraud victim assistance.
  • Together, you and the consumer assistance associate identify fraudulent items. The items are investigated and verified.

Step 3: Experian Investigates

Experian verifies the information that the consumer alleges as fraudulent with the creditors or data furnishers.

  • Upon receipt of a valid police report or valid state approved identity theft form, Experian blocks alleged fraudulent information from view by creditors and other users of the report. This allows you to continue to be credit-active without being penalized for any fraudulent information on your report.
  • Experian employs special system procedures and matching criteria to ensure that fraudulent data is removed as soon as possible.

Step 4: Fraudulent Data Is Removed

  • Experian must complete an investigation within 30 days (or 45 days if information on an annual credit report is disputed).
  • The data contributor is asked to verify the information it reported with its records.
  • Once the response is received, the consumer will be notified of the results of the investigation.

Security Freezes — Learn More

More Resources

If you suspect you are a victim of identity theft, here are some important contact information that can help you respond:

Experian Fraud Division
1 888 397 3742

Equifax Fraud Division
1 800 525 6285

TransUnion Fraud Division
1 800 680 7289

Driver’s license number fraud – Notify your state’s Department of Motor Vehicles

Social Security number used to commit identity theft – Notify the Federal Trade Commission at 1 877 ID THEFT or 1 877 438 4338

Passport used in identity theft – Contact the U.S. State Department, Passport Services Department

Mail fraud – Visit the U.S. Postal Service® Website, Government Services

NEW SSA89 FORM

4. December 2013

We have been informed by the Social Security Administration that the below document will only be accepted when requesting a social security number verification. Please save the newest copy and update your records.

 

 

NEW SSA89 FORM

  

4506T, Consumer Credit, Loans, Mortgages, Red Flag, RED FLAGS, Tax Return Verification