CHECK YOUR CREDIT REPORT

Your credit report and score can open the door to getting a new house, rebuilding your credit, or getting that new job. Why view your credit report? Sometimes creditors make mistakes on your credit file.  Also, someone may be using your credit (identity theft) to make purchases in your name. Low credit scores can increase your interest rate costing you extra dollars. A credit check-up will help you maintain a healthy credit file.

“Every 79 seconds, a thief steals someone's identity, opens accounts in the victim's name and goes on a buying spree.” -CBSnews.com

What's a FICO® score? Your FICO® score is the numeric representation of your financial responsibility, based on your credit history. Based on a scale of 300 -850, there are three FICO® scores - one from each national credit bureau. These three FICO® scores are the measure that most lenders will look at when evaluating your credit or loan applications.

FICO Score Expansion
A FICO® Score for Universe Expansion - The FICO® Expansion™ score is a new credit risk score from Fair Isaac designed specifically to help lenders extend credit to consumers in new markets. Because it is based on non-traditional credit data, it can effectively predict risk for the growing number of U.S. consumers that fail to receive a traditional FICO score due to non-existent or "thin" credit histories.

Why FICO® Expansion™ score? - It helps lenders better serve the "credit-underserved" market.  Because it uses alternative data sources, the Expansion score helps lenders confidently extend credit to consumers that are typically excluded from the traditional credit-granting process due to insufficient credit histories.

It helps "new-to-credit" consumers gain access to credit faster.  It can help consumers gain access faster to traditional credit products like credit cards, car loans, or home loans from reputable lenders by evaluating financial relationships that are absent in credit bureau reports.

Value to Community - What does it mean for our community?
A fair shake for new-to-credit consumers.  The use of FICO® Expansion™ scores gives millions of US consumers a fair opportunity to achieve the credit they've earned. Now, consumers without extensive credit histories can qualify faster and more easily for their first credit card, auto loan or home mortgage, including:
· Young people
· Immigrants
· Recently widowed or divorced
· Consumers that have traditionally operated on a "cash basis"

The challenge of evaluating consumers with no credit reports and no credit scores.  Without the use of FICO® Expansion™ scores, lenders must process their credit applications the old fashioned, time-consuming, and costly way. Each applicant must provide documents such as copies of rent and utility payments, verification of employment history and home address, and others. Even if their applications are approved, they often pay higher interest rates because, with little or no credit history to consider, lenders have difficulty assessing credit risk accurately.

FICO® Expansion™ score – improving the process!  FICO® Expansion™ scores give lenders a powerful new tool for objectively and accurately evaluating credit risk. Compared to the neighborhood banker who knew all his or her borrowers, credit scoring may seem impersonal. But we have found that that in today's fast-paced credit environment, a quick, objective assessment, as is provided through the FICO® Expansion™ score, better serves the interests of lenders and consumers alike.

A fair and impartial evaluation - The score analyzes only data with a proven link to a consumer's future credit performance. It helps decision makers ignore information that should have limited impact on their decisions. Everybody misses a payment now and then. What counts are overall credit patterns, and activities other than credit mishaps. Scores should do more than just ding you for missing a payment, they should also give you points for maintaining a good overall payment record. They look at many factors, and the relationship between them, to give the best possible forecast of each person's future credit performance.

Bottom line: FICO® Expansion™ scores help lenders and other businesses remove the guesswork, inconsistency and misconceptions from their operations. Each applicant for credit receives an unbiased evaluation based only on relevant information. The benefits for consumers are faster service, less paperwork, and often a greater chance of being approved for the credit they've earned

It's a credit risk score - It accurately predicts the likelihood that a consumer will become seriously delinquent in the 24 months following scoring.   It's part of the FICO® score family.  Because it is a FICO® score, it delivers the same  accuracy and benefits as our Classic and NextGen scores:

It's based on alternative data sources  - The Expansion score evaluates data from multiple non-traditional data sources to provide a complete view of the consumer's credit risk. Fair Isaac has selected the best commercially available data sources to power the score.

FICO® Expansion™ Score Availability - The Expansion score is now available to U.S. lenders for originations decisions in on-line and batch mode. The score is calculated and delivered by Fair Isaac Credit Services, Inc., a wholly owned subsidiary of Fair Isaac Corporation.

Here's how your FICO® scores could affect your interest rate:*

  FICO® Score Interest Rate

720 - 850 5.597%
700 - 719 5.722%
675 - 699 6.259%
620 - 674 7.409%
560 - 619 8.531%
500 - 559 9.289%

CLUE:  Comprehensive Loss Underwriting Exchange

What is a C.L.U.E. report?  
It is a database of personal information primarily relating to insurance claims on private property or on insured individuals/parties. The database is compiled and currently operated by Choicepoint Asset Co. of Georgia. C.L.U.E. is an acronym for Comprehensive Loss Underwriting Exchange. In brief, a C.L.U.E. report details the "claim history" of a given consumer.

Why should I know about my C.L.U.E. report?
Insurance providers use the C.L.U.E. database for obtaining information about both the consumer purchasing the property and property, itself. Experts agree that the filing of two claims within three years will increase the likelihood of a new proposed insured individual or new proposed insured home to significant risk of being rejected by insurance carriers. When Selling or Buying, it is wise to receive a current copy of the C.L.U.E. report to guarantee that you can obtain insurance coverage.

What type of personal information is made available on a C.L.U.E. report?
Generally the report includes information such as:
o Insurer's name
o Insurer's birth date
o Insurer's sex
o Current and previous addresses
o Claim History of the individual or the property
o Date of the claim
o Name of the insurance company involved
o Policy number
o Claim number
o Address
o Cause of loss amounts paid status of the claim
o Name of the insured and the claimant

Consumers are reporting that they are surprised that their history may include any calls made to their insurance representatives regarding a loss, whether a compensation claim was filed or not.

Frequently Asked Questions

How long is loss history kept in the CLUE database?
The database contains up to 5 years of personal property claims history.

Can I order a CLUE report on property I want to purchase?
No. CLUE reports are protected by the Fair Credit Reporting Act and can only be accessed by the owner or lender for the property. However, you can request that the current owner of the property order a CLUE report.

How can I find out what my loss history is?
Under the Fair Credit Reporting Act, you can request a copy of this information from ChoicePoint Consumer Disclosure, PO Box 105108, Atlanta, Georgia 30348-5108, or call toll free (866) 527-2600.

What if I find incorrect information on the report?
If you want to challenge the accuracy of specific information an insurance company provided or would like to enter a statement explaining the loss more fully, contact ChoicePoint's Consumer Center at (866) 718-7684. They will verify your information with the reporting insurance company and notify you of the results within 30 days.

If you feel an item on the report deserves an explanation, you can submit a personal statement which will be added to all future CLUE reports.

Why are insurance companies allowed to obtain a copy of my loss history report?
Under the Fair Credit Reporting Act, ChoicePoint is allowed to produce a CLUE report for the following insurance related purposes:

  1. When the consumer reporting agency has reason to believe a person or company intends to use the information in connection with the underwriting of a consumer's insurance policy. This includes situations where the consumer asks for an insurance quote or applies for insurance.
  2. When the request for the CLUE report is initiated by and at the request of the insurance company or agent.

Can an insurance company use loss history from the prior owner of a home in determining my eligibility to get insurance on the home?
Yes. There are no laws that prevent a company from using the prior owner's loss history in determining your eligibility for coverage. If a company can show a relationship between the prior owner's loss and the probability of a future loss to the home, they may use the information.

Can the insurance company report claims that are closed without payment to the CLUE database?
Yes. There are no laws that prohibit the reporting or use of claims closed without payment for underwriting or rating purposes.

Can the insurance company report an inquiry about a loss to the CLUE database when no request for the processing of a claim was made to the company?
Yes. There are no laws that prohibit the reporting or use of and inquiry about a loss for underwriting or rating purposes.

Does every company report all losses to the CLUE database?
No. Some companies choose not to participate. Losses filed with nonparticipating companies will not appear on a CLUE report.

Why do insurance companies use loss history?
Actuarial studies conducted by insurance companies have shown a correlation between a consumer's prior loss history and his/her future insurance loss potential. Along with other factors, this history could be considered when companies make their decisions to issue policies and determine premiums.

 

If you have any questions or need additional information about your rights as an insurance consumer, call theConsumer Hotline at 1-800-562-6900 or visit their website at www.insurance.wa.gov


CLUE is a database which includes homeowners policy claims information.  Insurance companies use the CLUE report in determining whether to issue or maintain new homeowner's insurance policies.  The report includes the buyer's claim history, and the history of claims regarding the residence.  If the buyer has filed too many claims, or the seller has filed too many claims for problems with the subject property, homeowners insurance may not be available.

What's worse, the insurance company can cancel a policy after the closing and transfer of title to the buyer.  How would you like to purchase a nice home without homeowner's insurance?  NEVER!  The insurer has 30 days from the application date to revoke the binder or cancel the insurance policy.

The top 3 reasons for canceling a policy, in addition to the number of claims filed, are:

So, what should you do?

This is an important problem and potentially costly.  This is a good reason to sign an agency contract with a buyer's real estate agent.  A buyer Realtor® knows how to protect you for CLUE problems and the other pitfalls related to the acquisition of real estate.  Happy house hunting, and watch those claims!


 

    Contact us for a free market analysis of your home:      

                                              Teri@BoulterProperties.com