Another Hit for the Mortgage Industry

There has been a lot of news lately about people who have less than perfect credit who have been instantly raising their credit scores by piggybacking onto accounts of people (by permission) who have good credit scores. It seems that since restrictions have been put in place for mortgages since the sub prime loans that were granted to those with weak credit has turned into a bust that people with poor credit are desperate to do anything that they can to raise their credit score so that they will be eligible for a home loan and other financing at a decent rate.

The mortgage industry has suffered dearly from the high rise of defaults and sub prime loans and with online services offering overnight instant credit boosters the mortgage industry feared it would be hurt even further. While it states no where that just because a person has poor credit that they are going to default on a home loan, recent events has made the mortgage industry very jaded about who they approve a loan for.

FICO has stepped in recently by stating that they will no longer score those that are registered as users on accounts. This is a double sided sword for the mortgage industry because on one side it will make it so that these overnight credit boosters are stopped in their track from raising credit scores on those with weak credit therefore allowing them with no choice but to fix their credit the right way. On the other side, the mortgage industry will see a loss in home loans that are going out and have to wait for either people with poor credit to fix their credit score or for another loop hole to be found in credit scoring.

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