MReport June 2017

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TH E M R EP O RT | 29 FEATURE expected, since most consumers who have a derogatory public record removed from their credit file will experience a FICO ® Score increase. Figure 5 also reinforces a point made earlier in this article, that the impacted population is generally low scoring and below a typical mortgage applicant popu - lation with a median pre-NCAP FICO Score 9 of 565, compared to a median pre-NCAP FICO Score 9 of 727 on the total population. Tried and True F ICO made the following key observations when examin- ing the impact to FICO Scores of NCAP-driven removal of public records from the credit file: • Six to 7 percent of the FICO scorable population had a judgment or tax lien removed from their file as a result of the CRAs' enhanced public record standards. • On the impacted population, the decrease in predictive lift post public record removal is modest; less than 1 percent K-S across all product types. • Impacted files are very likely to have additional derogatory information on their credit file and therefore tend to score rela - tively low, below many mort- gage lenders' thresholds, even after the public record data in question has been removed. While FICO encourages lenders to conduct similar analyses on their portfolios and any custom models that use credit bureau data to fully understand the impact to their specific situa - tion, FICO did not find material impacts to the FICO Score post- NCAP on the aggregate. JOANNE GASKIN, AMP, Senior Director, oversees FICO® Score's regulatory practice and mortgage solutions. She has led analytic and product development to address regulatory stress testing, capital allocation, portfolio credit risk management, and mortgage strategic default, resulting in several patents. FIGURE 5: Cumulative score distribution of pre-NCAP FICO ® Score 9 & post-NCAP FICO ® Score 9, on the impacted population FIGURE 4: K-S of post-NCAP FICO ® Score minus K-S of pre-NCAP FICO ® Score, on the impacted population

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