Fico-Mortgage Scoring

[Anonymous]

I met with a lender today (a savings and loan) and they shared with me that their fico scoring model would probably come back lower than the fico scores I showed her because it is "tweaked" for the mortgage industry and scrutinizes your mortgage more carefully. Any thoughts or comments on how true that is?

[haulingthescoreup]

That's definitely odd, because the FICO's that you get here ARE the mortgage industry version, also called "classic FICO's."

Maybe she has had many distraught customers who had pulled FAKO's and gotten surprised when they saw the real thing. After a while you can get tired of trying to explain the difference!

When you get her version, if they're really different, could you please post back here? Because I would like to pass that on, if that happens. Every time I think that I've figured things out, someone changes the rules again.

[RobertEG]

The FCRA, as amended in 2003, only requires that consumers have the right to access the credit reports of the three CRAs and their generic consumer score, for a reasonable price.  The report alone, without the score, may be obtained free once a year.  Mortgage generated scores are specifically exempt from this requirement of the FCRA.  Period.  However, the FCRA does require that once you apply for a mortgage loan,  the lendor considering your application must provide you with the score that they are using, regardless of whether they got it from a CRA model, or generated it themself.  There is thus no way to get this score until one actually applies for a mortgage, so you can not shop around to evaluate mortgage scores in advance of applying.  Further, states are specifically prohibited under the FCRA from enacting any such requirements.  Its the deal agreed to to get the law enacted.  That's business, folks....

[Anonymous]

The lendor pulled my credit score and it was considerably lower (33 points) than what I pulled at this site. I pulled all 3 bureaus on 02/05/08 from the fico website and they were all off by more than 25 points when the lender pulled them. This is extremely depressing as I have been looking for houses based on mortage rates based on the scores I see here. I am wondering how accurate this site is.

MYFICO.com scores

EQ 655

TU  643

EXP 645

Score pulled by lendor 611 at the middle bureau!

[haulingthescoreup]

When you talk to your lender again, can you ask him/her the exact names of the scores that he/she pulled? Like "Beacon" or "Empirica." also if there are any numbers attached to them like 98 or 5.0. The EQ and EX scores should be the same. The TU might be different, if they are using the new-ish model that is beginning to replace the older one.

It is possible that something hit your accounts between when you pulled your scores on 2/5 and when the lender pulled on 2/8 (hope not!) Do you have access to the reports that came with the 2-8 scores? I would be worried about a derogatory having hit during that interval that cost you 25 points on all three, like an account posting as late, or something.

If there is any way that you can compare your 2/5 reports to the 2/8 lender version, or ask the lender to do so, there needs to be a line-by-line comparison to see if there are any differences.

edit: also compare the balances on all your revolving accounts very closely. If one or more accounts showed higher balances on the 2/8 reports, due to updates from the credit card companies, you might have been pushed up into a higher utilization (balance due divided by credit limit) tier.

I don't know if you're aware of this, but if you can make payments on all your CC's about 5 days BEFORE the statement posts, and get them down as low as possible, with many showing a $0 balance, you can get a very nice score jump. The statement date is not the same as the due date. The statement date is the date that the statement appears or is "posted" on your online account. It is also the date that displays at the top of your printed, mailed statement.

Many people don't realize this, but even if you pay off your cards every month when you get the statement, the figure that is reported to the CRA's is the figure that you owed on the statement, not the $0 after you pay. If you use your cards a lot, it looks like you're carrying a lot of debt, and that hurts your scores. So if you can pay online, do so about 4-5 days before you think the statement is due to post, do this with all your cards, and within one billing cycle (essentially within a month), you should see score improvement. You can still use your cards as much as you like, just pay them down or off BEFORE they report to the credit bureaus, which is usually on the statement date.

Message Edited by haulingthescoreup on 02-10-2008 03:43 AM

[Anonymous]

I will ask the lender what they use. I am 99% certain nothing hit because I pull the reports from every bureau most everyday. I pull directly from Transunion (true credit) Equifax and Experian (Credit manager). They have faco scores. I also pulled the actual scores from all 3 on February 5th from myfico because I was getting ready to apply and because I am obsessed with getting my credit in excellent shape to get out of the high interest rate trap I am in (car, etc). Nothing on the reports have changed I pulled them again today (Sunday). I only have one credit card and it is at 2% utilization.

I am suspecting the lender uses some type of program that manipulates the fico score data perhaps for people like me with spotty or recovering credit. I haven't had a mortgage late since 2004. I am going to have another lender pull it as well since I am now in the middle of applying for mortages.

Of course I don't have to tell you what kind of interest rate they will offer me with a 611 vs a 655 or 645.

Thanks~

[haulingthescoreup]

Since there is now a question of different lenders with different rates, you might want to have this thread moved over to the Mortgages board. Another option is to pm Lady_Scarlet (who is a Realtor) and ShanetheMortgageMan (who is a mortgage lender) and ask if they would review this thread and comment here. Either would be very knowledgeable about the different rates that you should be able to expect with your FICO's and your specific credit history.

I selfishly hope that you'll ask both of them to reply on this thread, because this is an interesting FICO scores question, and I get pretty lost over on Mortgages! But if you'd like me to move the thread, just reply back here, and I'll pop it over.


edit: moved from Understanding FICO Scoring at request of OP

Message Edited by haulingthescoreup on 02-10-2008 11:30 AM

[sh9730]

Just remember though that if you use the method of making a payment BEFORE your statement date to keep the utils down you also have to make a payment AFTER the statement date and BEFORE the due date...otherwise you ll get a late!

[haulingthescoreup]

That's true, and I nearly got a 30-day late once on an $8.95 balance that I allowed to report. On a score pull, ironically! whew, that was a close one.

Always check your statement after an early paydown to see if you still have a minimum payment for that month. Three of my cards don't require any additional payment, but the other two stinkers do, which is why I generally PIF all but one. I don't need anything extra to keep track of!

[Anonymous]

 Got approved with a fico average of 611.  5.5% fixed  30.  I thought that was great.