New Credit Scoring Armbar

Do you have an Adjustable Rate Mortgage (ARM)? 

Prepare to be viewed differently by credit card companies, auto lenders, and banks.  There’s a new credit scoring system in town and it rates consumers based on the type of loan they have (i.e. fixed or adjustable).  It’s a credit score armbar.

From Equifax.com, “Equifax Equips Financial Institutions with Valuable “ARM” Mortgage Predictor”

Equifax Inc. (NYSE: EFX) )has launched a new solution to help financial institutions determine the likelihood that a consumer has an adjustable rate mortgage (ARM). With about two million loans expected to reset over the next 18 months, Equifax’s ARM PredictorSM gives lenders the information they need to further refine their portfolio risk management and account acquisition campaign strategies.

The Equifax ARM Predictor model identifies consumers within a lender’s portfolio or target markets that have a high statistical probability of holding an ARM loan. This ability to better identify consumers with an ARM is especially important in the current marketplace, in which ARM resets are raising payments and impacting behavior.

“In the current credit economy, many financial institutions have had to pull back their acquisition activities and implement tighter portfolio management strategies,” said Dann Adams, president, US Consumer Information Solutions, Equifax. “Unless businesses have detailed information about their customers and prospects, they have no way of knowing whether a consumer has an ARM. By using Equifax ARM Predictor, financial institutions can re-commit to growing their portfolios with greater knowledge, and better deploy resources to manage existing accounts.”

I suppose it’s more like a kimura and the counter/escape is converting it to a fixed rate. 

(source=equifax.com/corp/pressroom/pressreleases/2007/2007_11_05.shtml)