To improve efficiency and consistency, the Small Business Administration will use Fair, Isaac & Co.'s small-business credit scoring system nationwide to process low-documentation loan applications.

The SBA said it is still in negotiations to get a "fair and final price" for the software package developed by the San Rafael, Calif.-based technology company.

John Cox, an associate administrator for financial assistance at the agency, said he could not estimate how much the system would cost. However, Mr. Cox noted that it is expected to save the time of 100 SBA employees.

"If you have these credits reviewed in 65 different places you get 65 different opinions. But if you have it fed into a credit system, you bring a greater consistency to the whole program," Mr. Cox said.

"That's very important from a lender's viewpoint," he added, "because if you're working with more than one SBA office, it can drive you nuts."

Lenders who participate in the low-doc loan program are cautiously supportive of the move to centralize credit scoring at the agency.

"The way I understand it, it will be kind of a test case," said Tony Wilkinson, president of the National Association of Government Guaranteed Lenders, based in Oklahoma City.

"The membership is not opposed to it as long as it is used correctly. There are shortcomings with it and judgment still needs to be a part of the credit decision," added Jackie Randle, the association's technical issues director. "They shouldn't use these numbers as the sole source of making a decision because there are situations when it (a loan) doesn't credit-score within some certain range but there's a reason for it. The SBA understands that," she said.

The agency considered several credit scoring products offered by companies including TRW, Dun & Bradstreet, and CCN Group's MDS division. But in the end, the agency was happiest with the Fair Isaac system.

"We liked the package," Mr. Cox said. "It was developed with Robert Morris Associates, and we have a long history of using their stats."

The scoring system also has what Mr. Cox called a front-end document tracing system that the other companies didn't offer. "The software keeps track of the application from place to place. It can interface with our mainframe. There were a lot of things that made us comfortable," he added.

But the chief appeal of credit scoring is the speed and ease it will bring to the review process. If the model is successful with the low-doc program, it could be used to review the underwriting of other SBA-backed loans. And it would bring an element of standardization to a system that now produces many regional inconsistencies, according to Latimer Asch, business manager of commercial products at Fair Isaac.

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