My credit is WAY worse than I thought it was.

[Anonymous]

I just got an FHA mortgage for 119,500 at 5.75% and I was feeling pretty good about myself so I decided to check my Transunion Fico.   Wow, it was bad--520.  It said there was absolutely nothing positive to say about my credit.  The mortgage wasn't reporting on there yet.  We closed on the house a week ago today.  How could I be that bad off and still have gotten the loan?  Our loan officer said I was the "shining star" on the app.  I am nowhere near shining according to FICO.   I really thought I was doing well.  Could the mortgage somehow be dragging my score down without reporting on there?  If it isn't, how much lower will my score go once it reports?   How can I make things better?

HSBC--owe $6100 down from $9100 three years ago.  Account is closed.  One thirty day late in June '05 and one in April '06, paying as agreed every month (CC for an ATV)  Ignored a GW letter

GEMB--Lowes $2100 charged off three years ago, now with LVNV--no payments

GEMB--JCPenny $250 charged off three years ago, paid off through CO in August (settled for less than full amt.)

Cap1--$2000 or so charged off three years ago, settled through CO in late '07 (less than the full amt.)

WFNNB--$2000 or so charged off three years ago, just sent a CO $300 (CO not on report yet)

Affil Acct--(tanning contract) $727 owed on defaulted contract--not paying

Discover--$79 left to pay off.  Card is closed, it got up to 90 days late 2 yrs ago.  Was $1500 at time of lates. (Will be paid off in March) Ignored GW

Med--$379 still owing out of $459 orig. bal.

M&I bank--$10k charge off, settled w/ CO for $4500 Nov.07--CO and settlement no where on report.  Just M&I and charge off with a 0 bal

_______________________________________________________

Wal-Mart--open 0 balance on $600 limit, but I'm not sure that it's really open (long story)

Cap1 Auto--$13k never late, open since Aug. '05

Citi--$6k never late, open since Dec. '07

First Premier--auth. user, open since Aug. '07 pay off every month

Student loands--$19k, in deferrment

I think that is most of the accounts.  There are one or two paid in full that I closed when I got divorced 4 years ago.  Some of these accounts have been duplicated on CR, but disputes have not removed duplicates.

[RobertEG]

I would count my blessings, and not complain.  Not to be negative, but prior lates, high %util of existing credit, and charge-offs, which you show, are the kiss of death on FICO.  I would venture to say that if your application had been for a prime rate credit card, you would not have received it with your credit report.  New revolv creditors look primarily at FICO.  But you applied for and received a mortgage loan, which is in a whole new ball park of evaluation.  Mortagage lendors look at income, lenght of residency, spousal income, debt ratio, etc., that is not included in FICO scoring.  You obviously have an income that supports the new mortgage, as compared to your total existing debt, and that won the game for the lendor.  FICO is not the begin or end all for consideration of mortgage/auto loans, both of which are secured, as opposed to the grant of revolv. credit, which is not secured.

As for what you can expect when the mortgage loan finally posts, well it will help and hurt.  It will most likely improve your credit mix category score (only 15%of FICO), but will most certainly hurt you install $util score, which will rise to 100% util for that loan.  But that is only around 5% of total score, so no biggie. YOu will win and you will lose.

Happy for you!  Enjoy the house, and forget FICO!  If you dont need to apply for new revolv. or auto credit in the near future, then your FICO is irrelevant!

Message Edited by RobertEG on 02-22-2008 04:48 PM

Message Edited by RobertEG on 02-22-2008 04:54 PM

[Anonymous]

The truth is that FHA is not FICO driven (yet)

You need 2 years clean and qualify for PMI (if needed)

And a FAKO score does not matter-

I would pull a FICO to see where you are at now and in 6 months-