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Tower Group Incorporated
Are FICO scores outdated in rating risk of home loan applicants?

WASHINGTON — Do you ever get the feeling that your credit score doesn't adequately portray your true risk as an applicant for a home mortgage?If your FICO score is a subpar 690 but you know that you are a solid candidate for a loan, do you think that lenders' heavy dependence on credit scores is unfair to you as an individual?You've got some company. Digital Risk, a mortgage analytics firm, is mounting an unusual frontal assault on one of the lending industry's sacred cows. It argues that credit scores such as FICO failed to predict large numbers of defaults during the mortgage bust years — most notably thousands of "strategic" walkaways by borrowers with high scores — because they could...

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