Primary marketRealtors Offer Consumer Credit Score Info
When Fair, Isaac recently partnered with the National Association of Realtors (NAR) to provide discounted educational credit scoring information to real estate agents it wasn"t because of a mortgage industry oversight.
NAR jumped at the deal first, and Fair, Isaac hopes the National Association of Mortgage Brokers (NAMB) and other mortgage industry trade groups follow.
Once protective of credit scoring information, Fair, Isaac says laws have opened access to the scores and it wants to make sure consumers get correct credit score information. To that end it offers discounted educational services to realty industry groups and others so members of those groups can be better equipped to inform their clients about credit scores.
Critics of the deal say mortgage brokers and lenders who typically are more immersed in credit issues are better equipped to inform consumers about credit scoring issues.
"NAR got to us first and said "We want to do this for our members." I would dearly love to have mortgage brokers have the same access so we can get around the perpetuation of myths," said Craig Watts spokesman for Fair, Isaac San Rafael.
San Rafael, CA-based Fair, Isaac is the largest provider of the system used to generate credit scores -- a statistical evaluation of creditworthiness. Credit scores are often used and heavily weighted by lenders when they approve or reject mortgage loan applications.
Consumers who don"t know the score, how it"s tallied and how to improve it, could be at a disadvantage in the loan application process.
Fair, Isaac says it offered the deal to NAR because real estate agents are the professionals on the front lines who consumers often initially seek out in the home buying process. Early credit score guidance can be crucial, especially if a consumer must take steps to improve his or her credit score. Legally improving credit scores can take time and consumers should have the best score possible before applying for a mortgage.
As part of the deal with Fair, Isaac, real estate agents get discounts on a credit score explanation product developed by Fair, Isaac and Equifax, Web site content, seminars and credit score gift certificates they can use as perks to give to clients.
"Realtors see consumers at the early stages and I think they are smart enough to know we are not looking for them to be advisors," said Watts.
Watts says Fair, Isaac didn"t give preference to real estate agents. Even before real estate agents had access to the discounts AFL/CIO"s Union Privilege and AAA Mid-Atlantic partnered with Fair Isaac in similar deals for discounted credit scoring information.
Critics -- in and out of the mortgage industry -- contend that mortgage brokers and lenders are more experienced in explaining credit scoring information because they are in the thick of all issues surrounding mortgages from applications to underwriting to closing, as well as credit scores, credit reports and other credit issues.
"The most professional Realtors are going to send the consumer directly to the broker or lender before they start showing them properties to buy, so that the broker or lender can counsel the consumer if necessary. The professional Realtor has his or her hands full with local ordinances, inspections, legal issues, negotiating contracts and educating the consumer about the marketplace. Lending issues, which include credit, they leave to their professional broker or lender partners," said Ginny Ferguson, vice president of NAMB, where she heads the credit scoring committee.
Ferguson says NAMB is looking at the discounted Fair, Isaac information service, but because each credit reporting agency (Equifax, Experian and TransUnion) typically yields a different credit score for each consumer, NAMB needs any such information to take all three agencies" information into account. Fair, Isaac"s credit scoring system is used to generate "FICO" scores for Equifax, but similar services from Fair, Isaac appears under different brand names when the scores are generated by Experian and TransUnion, said Ferguson.
"All creditors don"t report to all agencies in the same time intervals and all creditors don"t report to all credit agencies. When you get three scores, you get as much as a 125 score swing between the three of them. It (Fair, Isaac"s discounted information service) is not as helpful to us as it is, because we have to run a tri-merged report for it to really make sense. Give me that (discounted information service for all three credit agencies) tool and my industry will eat that up," said Ferguson, who is also co-owner and broker of Heritage Valley Mortgage, Inc. in Pleasanton, CA.
Sarasota, FL-based consumer advocate Gerri Detweiler says consumers should check their credit reports and scores before taking the home buying plunge, but she"s concerned NAR -- which doesn"t want lenders selling homes -- is treading on lenders" territory.
"There are literally thousands of different loan programs available for any range of scores. To have your Realtor help you check your credit report and score -- without the input of a lending professional -- would be like, say, asking your mortgage broker to show you homes for sale," said Detweiler, author of "The Ultimate Credit Handbook" (Penguin Books, $14) and president of Ultimate Credit Solutions Inc.