Lenders may see more of your credit skeletons
If you’ve cheated your ex out of child support, were tossed out by the landlord or have fallen behind on a payday loan, it could come back to haunt you when you try to get a mortgage, credit card or auto loan, thanks to a new credit history product from credit reporting giant CoreLogic.
On the bright side, if you’ve been told your credit file is "thin" because you haven’t had a credit card or a car loan, but you’ve been making child support, rent or payday loan payments on time, the new product will share that clean history with lenders.
Homeownership advocates have long argued that people of color are needlessly shut out of the housing market because they’re more likely to have thin credit files, or no credit, than white borrowers.
CoreLogic also plans to add information about how you pay utility, rent and cell phone bills to its new CoreScore.
For consumers, the new product underlines the importance of knowing which of your creditors report your late payments to CoreLogic or another credit reporting company, just in case you ever can’t pay all your bills on time.
Unit now, only Experian, one of the three big credit reporting agencies, handed out information about rental payment histories, which comes from landlords who agree to report the information.
The CoreScore will pull information from public records on real estate, mortgages, tax payments, eviction, bankruptcies, liens, judgments and child support, as well as rental applications and payday and online lenders.
Consumer advocates likely will be unhappy over the inclusion of payday loan information, since those loans carry interest rates as high as 1,000%.
They’ll also be looking for proof that your willingness and ability to pay the cell phone bill actually predicts whether or not you’ll pay a other bills, like a mortgage, on time.