Why is your middle score used when applying for a mortgage?

[sunflower17]

Hello:

I am new to this thread. I just applied for a Pre-Approval with my bank and was told that the middle credit score is used. Can someone please advise whay the middle score is selected for this process? My Experian Credit score is higher than my middle score (Equifax) and I am wondering why they would not use the higher score.

Please advise.

Thanks,

sunflower17

[DallasLoanGuy]

old banking rules....

throw out the high and low.... this seems to be the best measuement of your willingness to pay your obligations.

not all creditors report to all three.... so this works in your favor sometimes.

[sunflower17]

Thanks for answering.

Any idea how I can specifically raise the middle score. I paid off all my debt last year and my scores are now:

Trans Union 653
Equifax 657 (middle score)
Experian 726

Do you think if I write to equifax and tell them that my score is reporting at 726 they will raise it? Any advice? i am planning to buy a home in March 2010 and would like to raise my score by then. The only debt I have is my student loan which I pay on time every month and I recently received a new cc from my bank which I pay off every month.

I would appreciate your advice. I am new to this whole process and really would like to raise my score.

Thanks

[Lel]

Where did you get your Experian score?  Actually, where did you get all your scores?  This is important, because if you didn't get your Experian score from a lender, then it may not be a true FICO score.  Similarly, unless you got your Equifax and Transunion scores from here, the Equifax website, or the transunioncs.com website, then you probably don't have true FICO scores either.

Each credit bureau uses their own proprietary formula to calculate their individual FICO scores.  You can't contact one bureau and ask it to change its score based on another bureau's score.  Also, the credit information at each credit bureau may be different.  You should check each credit report to see what is contained on them.

ETA: re-reading your original message, it sounds like you did get these scores from a lender.  Is this correct?

Message Edited by Lel on 09-24-2009 08:39 PM

[sunflower17]

Hi

I received my scores from my bank when applying for a pre-approval.

Last year I reviewed my scores from FICO.com. They have gone up since then (thank goodness) due to paying off of all my debt. I was excited to see my Experian score at 726, but was discouraged when told by my bank's mortgage dept that the middle score would be used. Now I want to know how to raise the equifax middle score within the next 6 months. Why are they reporting it lower anyway?

[Lel]

Get actual copies of your credit reports, not just your credit scores.  You can get them for free at annualcreditreport.com.  See what is listed on each report, particularaly the TU and EQ reports, to see if there is information on those reports that is weighing down your score.

[RobertEG]

As has been said, try to find anything in your CR with the middle CRA that might be different.

That being said, even if your have exactly identical credit reports with each CRA, your scores generated by each, even if true FICO scores, will still vary by as much as 20 points simply because each CRA licenses its own, separate, scoring algorithms from Fair Isaac.  Dont ever look for the same scores from each.

[Anonymous]

Are you trying for a conventional loan, or FHA?

If it's FHA, a higher score really won't make much difference.

Also, once you have your reports, go to the credit section of the boards for help with raising scores.

Message Edited by deemac on 09-25-2009 07:27 PM

[sunflower17]

I think I will go for an FHA Loan since I am a first time buyer, but I am new to the whole process so I am open to whichever loan type is best. My bank's mortgage rep is the one who proposed an FHA loan due to my middle score of 657.

Thanks for the tip regarding the credit section on the boards. I will read up on this and join that discussion as I am currently trying to raise my middle score. I am SO proud of myself for obtaining a 726 score from Experian!! I feel really good about my achievements in paying off all my debt in 1 year without bankruptcy or consildation.

These boards are cool in that you have a place to share and people who are very giving to each other. You need that when you come out of a debt situation. Do yo have any tips on which loan type is better? I am planning to make a purchase next March and would like to buy a 1 family. I plan to live in it for 2 years and then rent it out possibly. I do not want to get into a loan that has free government cheese and too many restrictions.

Thanks

[Anonymous]

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@sunflower17 wrote:

These boards are cool in that you have a place to share and people who are very giving to each other. You need that when you come out of a debt situation. Do yo have any tips on which loan type is better? 

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FHA is great if your scores aren't perfect or you don't have much of a down payment.  FHA mortgage insurance is cheaper than a conventional loans and PMI for conventional loans can be restricted based on scores.  If you have 20% or closer to it than you'll probably want a closer comparison of the two from your loan officer.  I believe you can move out later and use for an investment as long as you don't try for another FHA loan at the same time.  But maybe the experts can confirm the rent it out thing for you..