CoreLogic, a company that already works with lenders to consolidate credit reports from the three reporting bureaus, is developing a new credit report and score. The company believes its information, culled from public sources and proprietary databases, could give lenders, employers, and any other company that wants to evaluate an individual’s risk, a more accurate picture of that individual. This new credit report will go far beyond reports from Equifax, TransUnion, and Experian.

In addition to the traditional information already available on typical credit reports, the new CoreLogic “CoreScore” report includes:

• Rent payment history, with missed payments being negative.
• Payday loan applications and payment history.
• Evictions, with any record being negative.
• Child support or other court judgments, with any record being negative.
• Property lax liens.
• The value of real estate property owned.
• Home ownership fee payment history.

CoreLogic claims that it can receive new information about a transaction or inquiry within 23 days, two months faster than the other credit bureaus. The company’s databases already have 1 billion consumer transaction records covering 99.9 percent of the United States population.

Like the credit reports from Experian, Equifax, and TransUnion, most information on the CoreLogic report will remain for seven years.

How to obtain a copy of the report

The new report is already available to lenders, but it won’t be available for free through AnnualCreditReport.com for another year, and the score calculation will not be available until March, after CoreLogic works with FICO to develop the formula. Consumers will be able to challenge any item on the report that is inaccurate, and considering the source for some information is publicly available information, I expect a high rate of inaccuracy.

Until the new report is available online, you’ll need to order the report directly if you’d like to review the information for any errors to dispute.

To order a CoreLogic “CoreScore” report, call 877-532-8778 or mail CoreLogic Credco, LLC, P.O. Box 509124, San Diego, CA 92150. You’ll need to include proof of your identity, proof of your address, your first, middle, and last name, Social Security number, current and previous addresses, and date of birth.

The effect of this new report on consumers

As a result of this new report, individuals who currently have a clean credit report but owe more on their home than its market value, even if they pay their mortgage on time every month, could now have this information provided to prospective lenders who will likely interpret this as negative. People who were not considered a risk without the CoreLogic report could now be unable to qualify for the best mortgage interest rates.

Having more information and a potential for a wider variety of blemishes, lenders will be more inclined to offer higher interest rates on loans or deny credit entirely. As these records focus on problems that affect poor individuals, like evictions, payday loans, and child support, it reduces even further access to credit for society’s neediest.

There’s also a possibility for marks to remain on the report that could be interpreted as negative despite legitimate circumstances. Renters have rights, and in some cases, can refuse to pay rent due to actions by the landlord. Nevertheless, lenders will likely see missed rent payments as a sign of risk. Since the missed payments are not inaccurate, the information can’t be disputed. You may be able to attach a comment to the report, but the new score that will be calculated based on the information will likely be affected negatively regardless of the comment.

What do you think of the new CoreLogic credit report and score? Is it a further invasion of consumer privacy or a better way for lenders to assess consumer risk?

New York Times, CoreLogic [pdf]

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Just last month, Bank Transfer Day encouraged disgruntled consumers across the country to move money out of their bank accounts and deposit the funds in credit unions and smaller, community banks. Partly as a result of this successful campaign, hundreds of thousands of American large-bank customers opened credit union accounts since the day the campaign was founded.

Another idea, though it hasn’t gained nearly as much traction with fewer than 600 Facebook fans signed on, is to leave the large credit card issuers behind by transferring outstanding balances to lower-interest cards, like those offered by credit unions. In an ideal world, customers would, on December 11, apply for a zero-interest, zero-fee credit card and include in the application instructions to transfer a balance from a higher rate card.

To figure out who’s behind Balance Transfer Day, you’ll need to trace it through several different initiatives and apparent organizations, but at the root, this effort was organized by a for-profit company whose primary business is an affiliate-based credit card application website. I’m wary about seriously promoting a movement that, when you look layers deep, is organized for the financial benefit of the parent company. Unlike Bank Transfer Day, organized by a woman with no ties or endorsement by the financial industry, the founders of Balance Transfer Day can be easily but not obviously traced to a site called credit-land.com, which has a “Student Credit Card Education Initiative.” This is not a non-profit organization, it is designed to promote the products of the parent website.

There is no association between this organization and the Occupy movement, though they attempt to make it appear there is a connection by using the Guy Fawkes mask in the Balance Transfer Day initiative logo and using “Occupy” language.

It’s also worth noting that the Twitter handle for the movement is “OccupyBankRate” — a company called BankRate just happens to be a competitor of the organizers. An article on Huffington Post identifies the founder of the movement, Michael Germanovsky, as a laid-off architect, but the writer conveniently neglects to mention that he is also the editor-in-chief of credit-land.com.

For Michael Germanovsky’s response, please see the comments below the article.

Regardless of who organized this movement and how the organizers are promoting it, individuals should always do what’s best for their finances. In some cases, that could include transferring balances from high rate cards to cards with 0% introductory APRs for balance transfers. There are potential traps, though. And the big issuers just happen to have been improving these offers recently, eliminating or reducing fees to entice more customers.

• If you do not pay off the entire transferred balance within the introductory period, you will be subject to higher interest rates, and you could be paying more total interest than you would have if you had left the balance on the original card.
• If you apply for or open many 0% APR card offers around the same time, your credit score could be negatively affected.

The rationale for the transfer from a anti-industry perspective is that since the large banks receive benefits from the government, like a facility to borrow money at 0% APR, it isn’t right that the banks charge even higher rates to their customers who borrow money. By bailing out Wall Street, the government supposedly intended banks to pass the savings to customers in the form of lower rates encouraging borrowing, but the banks decided to use the funds to keep cash on hand to improve their appearance of financial condition for the benefit of their shareholders. Interest rates have been higher since the bailout than they had been in recent years, but there are less expensive options for borrowing than these major issuers.

At the same time, the best zero-balance transfer introductory offers are still promoted heavily by the major issuers. If you look at the website for the underlying company that organized the movement, they promote Citi, Capital One, and Discover as being the best cards for balance transfers. This is despite the movement’s apparent goal to recommend credit unions and small banks.

As a movement, Balance Transfer Day won’t gain as much traction as Bank Transfer Day. The back story isn’t compelling enough, and the motivation, though well-buried, is profit and promotion for the underlying company.

Will this movement inspire you to transfer a high credit card balance from one card to a zero-interest offer on a different card?

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