Following the launch of BEACON 9 by Equifax, brokers are reporting record-high credit scores – including one likened to mythical creatures.
“Clients who pay their mortgages on time, that will be reflected on the credit score. Yesterday, one of my underwriters saw a 900 BEACON, which I always thought was a myth, the unicorn, the White Whale,” Mike Havery, a mortgage planner with Mortgage Architects
, told MortgageBrokerNews.ca. “I think that’s more a reflection of reporting things that reflect positively like mortgage payments.”
Equifax unveiled a new BEACON score, which will be delivered on the Expert and Morweb platforms, earlier this month.
It’s “the newest FICO Score version in Canada to help you make credit decisions with confidence,” according to the user guide provided to brokers, which was obtained by MortgageBrokerNews.ca. “It allows you to effectively evaluate new prospects by predicting the probability of an account going ‘bad’.
So far, brokers have noticed both positive and negative impacts of the credit score.
“Basically it’s much more pronounced on the positive and negative side. An example: I pulled a BEACON … one client seemed to be more penalized for a recent late payment,” Havery said. “Recent late payments are going to penalize you more and over the limits are going to penalize more.
“The positives are more heavily weighted, but so are the negative. I asked the guy from Equifax if he had ever seen a 900 and he said he hadn’t.”
That experience has also been had by Mike Maguire, a broker with Mortgage Wise Financial, who has noticed record-high credit scores.
“The change has been positive. I’m sure people are dropping but I’ve never seen BEACONs so high. I’ve never seen an 880 beacon before,” Maguire said. “We have some a lot of clients with very good credit, so it’s kind of cool when you tell them they have 875 instead of 809.”