Mortgage Companies don't use FICO?!?!?!?!

[MortgageBound]

Hello all,

My husband and I are hoping to buy a 2nd home (it will be our primary residence and 1st will become rental property) in the next 6 months. We are getting some prelim things taking care of so they'll be few surprises when the actual time comes. So, we just pulled our credit scores:

Me 729 (Equifax FICO)/748/758

and

Hubby 697/713(Equifax FICO)/728

Our LO said there's no need to get FICO scores because mortgage companies don't use them??!?!??!!? Is this correct??????? I've never heard this before.  He's been great to work with but now, I'm starting to question his knowledge. He's with a company called Element Funding.....Maybe I should check out my bank or credit union again....

Can anyone clarify?

[StartingOver10]

Actually I've used Element Funding and they are an excellent company to work with for mortgages.

Having said that, it sounds like the particular loan officer you have is either new or he is being very picky about the name of the mortgage scoring algorithum.

There is somewhat of a difference between the consumer FICO scores that we see and the FICO mortgage scores that lenders see. We can't get access to the FICO mortgage score unless we go through a mortgage lender. Most of the lenders (including Element Funding) refer to these as FICO scores and just don't mention the fact that the formula for mortgages is slightly different. [They are different in the same way a auto enhanced FICO score is for vehicles].  You actually get a higher mortgage score if all of your balances on unsecured debt is zero.

So back to your inquiry, ask him what the scoring algorium is if its not a FICO generated scoring model. It would be interesting to see what he says.

[boomhower]

There actually may be a bit of truth in it.  The score I got on mine was a bit lower than my FICO and the range given certainly wan't FICO score range.  Lender is Wells.

[haulingthescoreup]

OP, ask your mortgage lender if the Equifax score is a Beacon 5.0. If so, it's the EQ FICO score that you get here.

They're probably using a more current version of TU --TU04 instead of TU98. Ask him if his is called Empirica. If so, and it's Empirica 04, it's the newer version of the FICO score that you get here.

And ask him if the Experian score is Experian FairIsaac v.2. This is the one that we used to be able to get here, before Experian refused to let consumers buy our own FICO scores.

These are the scores used by Fannie Mae and Freddie Mac, and therefore they are the ones used by most mortgage lenders, but not by all.

For instance, FICO now has a specific mortgage score that is a newer scoring system than the three listed above.

At any rate, you have a right to get copies of your credit reports and scores from a mortgage pull, so check to see if there is a score name on there somewhere. They're often at the bottom of the score report.

[jaypeedee]

I spoke with a loan officer/broker as well.  I talked to him about getting my scores in better shape before taking the plunge later this year and trying to get a mortgage.  He gave me a similar story.  He said the scores I see here will differ.  Could be higher or lower, he said.  He did not name any specific, though in April I will get an updated score and visit with him to see where he shows me at.  Its very aggravating that there are different s scores used by different lenders.  Perhaps knowing up front which score a lender uses would help us find better rates....but I guess thats cheating.. I mean thats alnost like banks/and auto finance companies not telling us what our scores are or how they conclude terms and rates to us....

[Anonymous]

What's the average deviation between what credit score we can see, and the credit score the mortgage lenders use?

[cdtotten]

There is no such standard deviation. Most lenders use the standard scores reported above, although some will use the mortgage enhanced or newer versions of scores sold here. If the lender does use a different version, there is no correlation as each formula puts different weights on different factors. Usually, not always, your EQ score on this site will match what the lenders pull. Most lender still use your beacon score.

[MBOhio2]

I definitely think there is just some confusion between the language being used between you and your LO. When I first started working with my lender, I told him that I knew my scores and he also said "oh, but ours will be different" because he just assumed that, like most consumers, I was pulling FAKO scores... I let it slide, but knew that I was in fact looking at "real" scores here.

What haulingthescoreup says should be helpful and this is something that totally varies from lender to lender. For example, my LO can actually pull two different sets of scores and just use the highest... one of the sets does use the older models sold here at myfico.com so the TU98 and EQ score that I see here is exactly what he saw on one of the score sets. The other one was slightly different because, as previous posters have said, oftentimes lenders will use newer models of the scores.

Be prepared for the scores your lender pulls to be slightly different (higher or lower) but also don't be surprised if what he/she pulls is exactly the same as what you see here on myfico.com