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One more time about credit scoring. You have probably heard about credit scoring if you have tried to get a loan recently. Credit scoring models have been used in the mortgage industry since 1994, when Fannnie Mae and Freebie Mac started using them for ease in gauging your ability to repay loans. They had been in use for a long time for auto lenders and Credit Card issuers.
It seemed logical that the credit scoring system would provide some relief from the excessive load of paper necessary for home loans.
Credit scoring models figure prominently in the future of how people obtain home mortgages. Most people know that most CREDITORs use Credit Report agencies for obtaining information on a person when they have applied for any type of financing. However, there are actually two levels of Credit Reporting agencies. There are three major locations of credit and background information. They are Equifax, Experian and TransUnion. When someone obtains credit, the CREDITOR reports the payment history to these repositories. This is usually done monthly but may be done on an irregular basis. These repositories (credit bureau) simply accept the information as it comes in electronically and they do not check the information.
Credit Records and background information is collected on all US persons who have a Social Security number or other identifying information. This information is collected by the three Credit Report agencies and other agencies, including the Department of Motor Vehicles, the Medical Information Board, the FBI, local law enforcement agencies, the county recorders for each county (public records repositories), etc. Even the mortgage industry has a central repository for borrowers and lenders who may have been involved in illegal activities in the making of mortgage loans.
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