UCB Services Inc., an independent credit reporting company in Chicago, and Fair, Isaac and Co., a San Rafael, Calif.-based provider of information management and predictive technology, together will offer software - called CreditQuote - that predicts the likelihood of mortgage loan default.
Designed to reduce portfolio risk and improve loan pricing, the Fair Isaac-developed system distills merged credit report information into a single numerical index.
Because the score provides an objective measure of applicants' credit risk, loan underwriters will be able to determine which applicants can be reviewed and approved quickly and which will require more careful review.
The scores can be used by lenders to adjust approval strategies to changes in the economy or applicant volumes.
The software, which analyzes UCB's credit report data, assesses many factors determined to be predictive of loan performance, including the applicant's credit relationships, payment history, and outstanding debt.
The information is weighted and combined into a score that reflects the applicant's position on a continuous scale of risk. The scores can be integrated into existing automated systems or can be used manually.