RC_LP_U_302.2 Credit Scoring Basics

Credit Scoring Basics covers fundamental concepts of the credit scores that are used in mortgage lending. First it will look at credit scores themselves, exploring how credit scoring models are developed and how individual credit scores are generated. From there, the course reviews the factors that drive the scores, information in the tradelines, as well as factors that do not affect scoring. The course then looks at how the various factors considered in a scoring model come together to create the meaningful, predictive final credit score as well as how variables are weighted to predict a credit score.

The factors that drive the scores and the reason codes used to explain them are described next along with the variance found in credit scores and how scorecard segmentation is used to evaluate consumer data. From there the course looks at the challenges posed by applicants who have no credit score and some of the ways in which credit can still be evaluated for these applicants. Finally, the course reviews other risk evaluation models beyond the credit score model that may be used to determine the risk associated with lending to a certain applicant.

This is a single-family/residential course.